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European Commission: Albania second-to-last in region for second-quarter growth as investment slows to 1.8%
Albania's economy grew 3.6% in the second quarter, matching the regional average, but only Bosnia and Herzegovina did worse. Albania is the only Western Balkan country where investment growth slowed.
By ANN Newsroom · Newsroom
October 21, 2026, 08:05 · Updated 12:22 · 2 min read
In brief
- According to the European Commission's latest report on candidate countries, Albania's GDP grew 3.6% in the second quarter, down from 3.7% in the first.
- Investment grew only 1.8%, down from 4% in the first quarter, while private consumption rose 4.6%, the highest in the region.
- Public debt fell to 49% of GDP at the end of June, 3.9 percentage points lower than at the end of 2025.
Albania's economy grew 3.6% year on year in the second quarter of 2026, according to the European Commission's latest economic report on candidate countries, as analyzed by Monitor magazine. The pace is slightly below the first quarter's 3.7% and matches the weighted average for the Western Balkans, but it puts Albania second-to-last in the region: only Bosnia and Herzegovina, at 2.4%, grew more slowly.
Investment stalls as consumption props up the economy
Investment is the main concern in the report. Its growth fell to 1.8%, from 4% in the first quarter and 9.9% in the last quarter of 2025. According to the Commission, Albania was the only country in the region where investment slowed in the second quarter, while it rose 16.5% in North Macedonia and 26.5% in Montenegro, driven mainly by public capital spending.
Private consumption remains the main engine of growth, expanding 4.6%, the highest rate in the region, followed by Kosovo at 4.4%. The report links this to strong wage growth.
The region picks up speed
Average growth in the Western Balkans climbed to 3.6% from 3.2% in the first quarter, the fastest pace since mid-2024. North Macedonia grew 4.3%, Kosovo 4.1%, and Serbia and Montenegro 3.8% each.
Public finances and the current account
On the positive side, Albania's current account swung to a slight surplus of 0.2% of GDP, measured over the last four quarters, thanks to services exports and especially tourism. Albania and Kosovo are the only economies where net foreign direct investment covers more than two-thirds of the current account deficit. The budget posted a larger surplus in the first eight months, while public debt fell to 49% of GDP at the end of June, 3.9 percentage points lower than at the end of 2025.
The report also notes that average annual inflation in the region rose to 4% in the second quarter, pushed up by food, transport and energy, while central banks with independent monetary policy left interest rates unchanged in the third quarter.
