Albania's economy robust in 2025, BoA policies ensure stability
Bank of Albania Governor Gent Sejko presented the 2025 Annual Report, highlighting Albania's robust economic and financial performance. Prudent monetary policy and a strengthened banking sector ensured price and financial stability throughout the year.
Prudent policy, stable prices
The Albanian economy expanded by 3.8% in 2025, driven by strong private-sector balance sheets, favourable confidence, tourism revenues, and credit growth.
Employment and wages in the non-agricultural private sector rose by 5.7% and 8.5% respectively, pushing the unemployment rate to a three-decade low.
Consumer price inflation averaged 2.2%, remaining low and stable, close to the Bank of Albania's target.
The country's external position strengthened, with exports reaching €10 billion and the current account deficit narrowing to 0.7% of GDP.
Public debt declined to 52.9% of GDP, and the budget deficit was 1.8%.
In response to inflation and exchange rate dynamics, the Bank of Albania eased its monetary policy stance, reducing the policy rate to 2.5% in July and actively intervening in the foreign exchange market.
Credit to the private sector grew by 14.4%, primarily in lek-denominated business investment.
Strengthening financial safeguards
Albania's banking system maintained a robust financial position in 2025, with strong capitalisation and high liquidity.
The non-performing loan ratio fell to 3.8%, its lowest since 2008.
The Bank of Albania's macroprudential framework confirmed contained systemic risks, with stress tests showing strong resilience.
New measures included loan-to-value and debt-service-to-income caps for residential real estate.
Regulatory alignment with EU standards continued, including the EBA equivalence process and amendments to the Law on Payment Services.
Efforts to strengthen financial integrity included implementing MONEYVAL recommendations and aligning with the Digital Operational Resilience Act (DORA) for cyber risk management.
The Resolution Fund exceeded ALL 7 billion.
Steady hand, steady growth
The Bank of Albania's 2025 report showcases a remarkable period of stability and proactive policy.
Its prudent monetary and supervisory actions have successfully navigated complex challenges, fostering robust economic fundamentals.
This sustained positive trajectory positions Albania as a compelling example of effective central banking in an emerging market context.