EBRD Nudges Albania's 2026 Growth Forecast Up to 3.5%

The European Bank for Reconstruction and Development (EBRD) expects Albania's economy to grow by 3.5% in both 2026 and 2027, according to its Regional Economic Prospects report, published on 24 September. The 2026 forecast is 0.1 percentage points higher than in June, an upgrade the bank attributes to reforms and investment linked to EU accession.

Albania's economy grew by 3.8% in real terms in 2025 and by 3.7% in the first quarter of 2026, the report says. Public administration, real estate and construction drove growth, while industry and agriculture contracted.

Inflation above target

Inflation rose to 3.4% in July 2026, above the central bank's target, pushed up by transport, food and housing costs. The government ran a budget surplus in the first half of the year, and public debt fell to 49% of GDP by mid-year, according to the EBRD.

The EBRD named competitiveness pressures, climate risks and energy-price volatility linked to the conflict in the Middle East as the main risks to its outlook.

Interest rates on hold

On 7 October, the Bank of Albania's Supervisory Council left its key interest rates unchanged: the base rate at 2.5%, the overnight deposit rate at 1.5% and the overnight lending rate at 3.5%. The EBRD report notes that the policy rate has stayed at 2.5% since mid-2025, so the October decision extends a pause of more than a year even as inflation has moved above target.