Economy
World Bank: Albania's economy to grow 3.4% this year and 3.6% in 2027, debt falls below 50% of GDP
The regular Western Balkans report credits Albania with stronger public finances and a firmer external position, but warns of its reliance on seasonal tourism and a narrow export base.
By ANN Newsroom · Newsroom
October 27, 2026, 14:49 · Updated 18:42 · 2 min read
In brief
- The World Bank forecasts economic growth of 3.4% in 2026 and 3.6% next year for Albania.
- Public debt fell below 50% of GDP, helped by a fiscal surplus in the first half of the year and a stronger lek.
- Reforms in trade in goods and services could lift GDP by up to 10% over the medium term, the report says.
The World Bank on Tuesday published its regular economic report on the Western Balkans, forecasting that Albania's economy will grow 3.4% in 2026 and 3.6% in 2027. According to the institution, the region's economies have proved resilient to shocks and continue to converge with European Union levels.
Record-low unemployment, gradually rising inflation
The report says Albania kept up steady growth in the first part of the year, driven by domestic demand, services and construction. Strong demand for workers relative to the labor supply pushed unemployment to a record low, while wages kept rising and poverty declined further. Lending remained strong and the financial sector stable, with few nonperforming loans. Inflation rose gradually through August, pushed by food and fuel prices, high rents linked to tourism and a sharp rise in wages.
Strong budget revenue produced a fiscal surplus in the first half of 2026, and that surplus, together with the appreciation of the lek, brought public debt below 50% of GDP. The external position was strengthened by higher foreign direct investment, larger foreign currency reserves and a narrower current account deficit.
Seasonal tourism and non-tariff barriers
However, the World Bank notes that growth still relies mainly on high-volume but low value-added seasonal tourism, while the export base remains narrow and many export relationships are short-lived. Since customs tariffs are already low, the report advises that reforms target domestic regulatory and administrative barriers, which it says can be two to five times higher than existing tariffs.
According to the report, reforms in trade in goods and services could raise the level of GDP by up to 10% over the medium term. Faster progress toward EU membership, productivity and private investment could improve the outlook, while global uncertainty, demographic pressures and climate risks remain the main challenges.
