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IMF for Albania: GDP grows to 3.6% in 2026, overall inflation at 3% target

2025-12-24 10:39:00, Ekonomi CNA

IMF for Albania: GDP grows to 3.6% in 2026, overall inflation at 3% target

The International Monetary Fund has shared new data from the report prepared on the Albanian economy.

According to the report, Albania's tourism-led growth and macroeconomic prospects are expected to remain strong. After an average of 4.3% in the post-pandemic period, real GDP is projected to grow by 3.5% in 2025, mainly driven by private consumption, and 3.6% in 2026, reflecting a modest acceleration in growth in the euro area's main trading partners.

Direct effects from US tariffs are minimal, while indirect effects from global trade measures and uncertainty also appear limited so far. Despite some moderation, tourism continues to provide steady support for economic output.

Headline inflation is projected to increase gradually from 2.2 percent in 2025 to the 3 percent target in the second half of 2026, amid a tight labor market and rising wages. The current account deficit is projected to be 2.8 percent of GDP in 2025 and to gradually widen to around 3.5 percent of GDP in the medium term, as rising disposable income and public capital spending boost imports.

The report highlights that risks to the outlook have shifted to the downside due to a more volatile external environment. Geopolitical tensions, escalating trade measures, commodity price volatility, and prolonged uncertainty could weigh on Albania’s major trading partners and weaken external demand. Global financial market volatility and asset price corrections could reduce demand for Albania’s sovereign debt and lead to refinancing risks.

Domestically, a sharper-than-expected decline in the working-age population could exacerbate labor shortages, fuel inflation, require a tighter monetary policy stance, and dampen growth prospects. On the positive side, sustained implementation of the EU reform agenda could boost productivity and growth. /CNA





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