The Supervisory Council of the Bank of Albania decided on Wednesday to keep its key interest rates unchanged, assessing that the current stance of monetary policy remains appropriate for maintaining price stability and supporting economic growth.
At a press conference, Governor Gent Sejko announced that the base interest rate will remain at 2.5%, the overnight deposit rate at 1.5%, and the overnight lending rate at 3.5%.
“The Albanian economy has continued to grow, while the main parameters of economic, monetary, and financial stability remain consolidated,” Sejko stated.
According to him, inflation recorded a slight increase during the third quarter, averaging 2.4%, but remains below the target of 3%. The rise in inflation, he said, was mainly influenced by higher rental and service prices, while food prices have declined.
“Domestic inflationary pressures remain in line with our target, supported by the stable performance of labor costs and productivity,” Sejko added.
The governor underlined that economic growth has been driven by household consumption, private investment, and expanding tourism, while the services and construction sectors have been the most dynamic.
According to INSTAT data, the economy grew by 3.6% during the first half of the year.
The labor market, according to the Bank of Albania, remains stable. Employment in the non-agricultural private sector rose by 3.4%, average wages increased by 9.5%, while unemployment stayed at a historically low level of 8.5%.
“A prudent monetary policy has helped reduce risk premiums and improve financing conditions. The monetary policy easing in July led to a further decline in interest rates on new loans and reduced the servicing costs of existing loans,” Sejko noted.
Private sector credit grew by 14% during the third quarter, with stronger performance in local currency lending and business investment loans. According to Sejko, the quality of the loan portfolio remains satisfactory.
Looking ahead, the Bank of Albania projects that inflation will return to its 3% target during the first half of 2026, while economic growth is expected to remain solid in the medium term.
However, Sejko cautioned that “the risk outlook remains complex,” citing trade and geopolitical tensions as potential sources of uncertainty. He added that the rapid increase in wages could exert additional pressure on inflation.
“Our future decisions will depend on the evolution of inflation expectations and domestic and international developments,” the governor emphasized, reaffirming that the Bank of Albania remains committed to preserving price stability and supporting sustainable economic growth.
In conclusion, Sejko stated that the current monetary policy stance “offers a fair balance between stimulating short-term economic activity and maintaining medium-term price stability.”
