Who is keeping Albania's external debt "on its feet"? - The government, the BoA and businesses brought about contraction. Banks, the only ones that increased their liabilities
The year 2025 ended with the country's external debt of 10.2 billion euros, but which sectors contributed the most to its reduction and who are the ones who are keeping Albania's foreign obligations "on track"?
According to the latest data from the Bank of Albania, almost half of the country's external debt has been taken on and is being repaid by the Government. The latter results in having liabilities in long-term instruments, such as loans or securities. From quarter to quarter, the General Government debt has decreased, due to the decline in liabilities in the form of bonds.
Meanwhile, the Bank of Albania's liabilities have also contributed to the further reduction of the country's external debt. Official statistics show that the Monetary Authority has mainly liabilities in the form of SDR allocations from the International Monetary Fund (IMF) worth 227 million euros.
Banks, otherwise known as depository corporations, are the only ones that contributed to the further increase in Albania's external debt. The increase of 123 million euros did not come only from developments in this sector, but also due to a sectoral reclassification where an economic entity was transferred from Other Sectors to the Depository Corporations sector. Around 69% of the external liabilities of banks are in currencies and deposits.
Other sectors, which may include businesses and a variety of companies, narrowed external debt. Part of this narrowing is related to the sectoral reclassification of an economic entity from Other Sectors to the banking sector, which has contributed to the reduction of the loan stock by about 50.5 million euros.
At the same time, there is a decrease in liabilities in the form of trade credits and advances, as well as a contraction in liabilities between companies linked in a direct investment relationship - intercompany loans and other debt obligations.
In total, long-term external debt has seen an expansion in the outstanding amount of loans and a decrease in exposure to debt securities. Loans continue to dominate long-term liabilities, accounting for 45% of the total. In short-term maturities, financial instruments in the form of currencies and deposits, as well as trade credits and advances account for 33% and 46%, respectively.
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