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Public debt drops to 48.79% of GDP, also decreasing in value in the first quarter

2026-04-29 16:25:49, Ekonomi CNA

Public debt drops to 48.79% of GDP, also decreasing in value in the first

The country's public debt has marked a significant decline in relation to Gross Domestic Product (GDP). At the end of March 2026, this indicator is estimated to have decreased to 48.79%, according to preliminary data from the Ministry of Finance for the first quarter of 2026.

The 4.08 percentage point decline in just three months is due to both the projected growth in Gross Domestic Product, which is estimated to reach around 2.8 trillion lek in 2026, and the reduction in the total stock of debt in nominal value. Specifically, the stock of central government and guaranteed debt decreased from 1.4 trillion lek at the end of 2025 to 1.35 trillion lek at the end of March 2026.

As can be seen from the data, external debt has had the largest decline (-2.66 percentage points). This happened because this debt is related to economic growth (GDP) and the strengthening of the Lek exchange rate, as well as the completion of some maturities.

Domestic debt has had a more moderate decline (-1.43 percentage points). Since this debt is entirely in local currency, its decline comes mainly from the growth of national product (GDP) and better control of new borrowing in the domestic market.

The debt that the state guarantees to third parties (such as energy companies) has also declined, falling from 1.73% at the end of 2025 to 1.49% in March 2026. This reduces the risk of unforeseen liabilities for the state budget.

The main reason for the decrease in debt in the first quarter is the projected annual GDP value. For 2026, Albania's GDP is projected to reach around 2.8 trillion lekë, a figure significantly higher than in previous years, which automatically reduces the weight of the debt stock on the total economy.

Unlike periods when debt increases in monetary value but decreases as a percentage, a real decrease in the stock was observed at the beginning of 2026. At the end of 2025, total debt was 1.4 trillion lek, but by March 2026, this value decreased to 1,357,171 million lek, further reducing the ratio to GDP.

A significant portion of Albania's external debt is denominated in Euros and Dollars. The strengthening of the Lek against these currencies during this period has caused the value of the external debt, when converted into the local currency (Lek), to result lower, directly affecting the decrease in the total indicator./ Monitor