"Migrants will bring less money in 2025" EBRD: Economic growth only 3.7%. Tourism also performs worse
The Albanian economy is expected to grow by 3.7% this year. This is the European Bank for Reconstruction and Development's (EBRD) February 2025 forecast for economic activity in Albania, a forecast that has not changed from February 2024. In its latest report, the EBRD emphasizes that Gross Domestic Product growth is expected to be 3.7% in 2026 as well.
According to the European Bank for Reconstruction and Development, Albania's economic growth is estimated to have been 3.9% last year, higher than forecast in September 2024, due to better performance in tourism, other services, and construction, while industrial and agricultural production have declined.
Private consumption and public investment were the main drivers of growth, while goods exports fell sharply, affected by the appreciation of the lek and weak external demand. Inflation fell to around 2.2% on average in 2024, allowing the Bank of Albania to lower the key rate from 3.25% in early 2024 to 2.75% in February 2025. The financial sector remained stable, with lending activity increasing.
Weakening demand in the eurozone, the potential decline in remittances, i.e. money brought in by migrants from abroad, and a weaker tourist season will lead to slower economic growth than in 2024.
Adverse climatic conditions (mainly potential droughts) could negatively impact energy production and lead to higher electricity imports, although increased solar generation capacity partially mitigates this risk.
However, continued structural reforms, a strong commitment to membership in the European Union, and the potential to receive more funds and financing from the latter will be supportive of economic growth.
As for the Western Balkans, economic growth remained around the same level as in 2023, at 3.5%, due to weak external demand from the region's most important trading partner, the European Union.
Tourism has remained strong, particularly in Albania and Kosovo (including diaspora visits from Western Europe), and to a lesser extent in Montenegro. The region's economy is forecast to grow slightly at 3.6% in both 2025 and 2026.
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