"Tourism and construction led the economy" - EBRD: Albania's growth 4% in 2024. What are the risks that are foreseen in the future?
Economic growth in Albania in 2024 was 4 percent, supported by the booming services sector, especially tourism and construction, while the opposite happened with industrial and agricultural production, which resulted in decline.
According to the latest report by the European Bank for Reconstruction and Development (EBRD), on the expenditure side, private consumption and public investment were the main drivers of growth, while exports of goods fell sharply — negatively affected by the appreciation of the lek and weak external demand — contributing to a wider current account deficit.
According to the report, inflation fell to 2.2 percent on average in 2024 from 4.8 percent in 2023, allowing the Bank of Albania to lower the key rate from 3.25 percent at the beginning of 2024 to 2.75 percent.
The financial sector remained stable, with increased credit activity. Meanwhile, the EBRD forecasts real GDP growth of 3.5 percent for both 2025 and 2026.
The positive outlook comes from the expected continuation of structural reforms, a strong commitment to EU membership, and potential access to EU financing.
While it is underlined that negative risks stem from weakening demand in the eurozone, a possible decline in remittances from abroad, and a slowdown in tourism growth after record numbers in the last two years.
The report cites that dry weather could negatively impact energy production and lead to higher electricity imports, although these risks are mitigated by increasing production from alternative renewable sources.
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