The Albanian economy has continued to demonstrate a stable performance during the second half of the year, according to the Bank of Albania’s assessments presented at the latest monetary policy meeting for 2025. Governor Gent Sejko emphasized that key economic indicators remain in line with expectations and support a positive outlook for the months ahead.
The labor market continues to strengthen, with rising employment and wages directly contributing to higher household consumption. The unemployment rate has declined to 8.1%, while wages in the private sector have increased by nearly 10%, without generating additional inflationary pressures.
Inflation has remained at moderate levels, averaging 2.2% in October and November, driven mainly by lower food prices and stable housing costs. Meanwhile, imported inflation has been in negative territory, helping to balance price developments in the domestic market.
In this context, the Bank of Albania decided to keep the policy rate unchanged at 2.5%, as well as the overnight deposit and lending rates. The banking system continues to be regarded as sound, with non-performing loans at 4.3%, reflecting financial stability and the quality of lending.
Economic growth has been supported by the expansion of consumption and investment, and in particular by service exports, with tourism recording a significant increase of around 22% during the third quarter.
Governor Sejko also highlighted progress in the modernization of payment systems, including Albania’s integration into SEPA and the launch of the instant payments project, bringing the country closer to European standards.
Foreign exchange reserves have reached €7.1 billion, reflecting prudent management and effective investment diversification policies.
Looking ahead, the Bank of Albania remains optimistic: the economy is expected to grow close to its potential, inflation is projected to return to the 3% target in 2026, and the labor market is expected to continue improving.
The conference also marked the conclusion of the decision-making cycle for 2025, with the Governor noting that the Bank of Albania has successfully fulfilled its mandate to ensure price stability, financial security, and market development, thereby strengthening the foundations of the country’s economy.
