Kosovo and Albania, the most "thrifty" economies in the Region

2025-12-08 12:23:00, Ekonomi CNA

Kosovo and Albania are the economies in the region with the highest savings deposited in the banking sector, relative to the total size of the economy.

Comparative data from the International Monetary Fund (IMF) shows that at the end of 2024, Albanian bank deposits were 66.24% of Gross Domestic Product (GDP).

This indicator returned to growth after three consecutive years of decline. By 2023, it had been 61.39% of GDP.

However, the deposit-to-GDP ratio has not yet reached the record level of 75% in 2020.

In general, rapid economic growth in the post-pandemic period has not been followed by a similarly large increase in deposits.

The exchange rate has also had a significant effect. More than half of bank deposits in Albania are in the Euro. Even the increase in deposits in recent years has come mainly in the European currency. However, the depreciation of the Euro against the Lek (approximately 25% since 2020) has negatively affected the value of foreign currency deposits and their ratio to national output.

However, for 2024, the deposit-to-GDP ratio has marked a significant improvement compared to previous years, partly due to the higher growth in deposits in Lek.

The country with the largest amount of savings held as deposits compared to GDP in the Western Balkans Region is now Kosovo, at 67.18% of GDP.

Albania ranks second, with deposits worth 66.24% of GDP. It is followed by North Macedonia, where deposits are worth 63.33% of GDP, Bosnia and Herzegovina, with 53.32%, Montenegro, with 52.44% and Serbia, with 46.82%.

In general, individuals in the Western Balkans region remain committed to more traditional savings instruments. This trend has been quite pronounced among Albanians as well. Although in the last decade there has been an increase in investment in Albanian government debt instruments, directly or through investment funds, the vast majority of Albanians prefer to keep their money in bank deposits.

It is estimated that at the end of last year, bank deposits accounted for about 88% of Albanians' total savings, while the rest is distributed among government treasury instruments, investment funds, pension funds, and corporate bonds.

Public deposits constitute the basis of financial intermediation activity in Albania and being a deposit-rich market has helped in the development of a stable banking sector independent of foreign sources of financing.

According to statistics from the Bank of Albania, at the end of September 2025, total deposits in banks reached 1.793 trillion lek or almost 18.7 billion euros. Compared to a year earlier, deposits increased by 152 billion lek or 9.3%./ Monitor Magazine