IMF Completes Article IV Consultation With Albania

The Executive Board of the International Monetary Fund (IMF) completed the Article IV Consultation[1] with Albania and considered and endorsed the staff appraisal without a meeting on a lapse-of-time basis.[2] The authorities have consented to the publication of the Staff Report prepared for this consultation.[3]

Albania’s tourism-led growth and macroeconomic prospects are expected to remain robust. After averaging 4.3 percent in the post-pandemic period, real GDP is projected to grow by 3.5 percent in 2025, primarily driven by private consumption, and 3.6 percent in 2026 reflecting a modest acceleration in growth in key euro area trading partners. Direct effects from U.S. 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 to economic output. Headline inflation is projected to gradually increase 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 at 2.8 percent of GDP in 2025 and to gradually widen to about 3.5 percent of GDP over the medium term as rising disposable income and public capital expenditure boost imports.

Risks to the outlook have shifted to the downside amid a more unsettled external environment. Geopolitical tensions, escalating trade measures, commodity price volatility, and prolonged uncertainty could affect Albania’s key trading partners and weaken external demand. Global financial market volatility and asset price corrections could reduce demand for Albanian sovereign debt and may lead to rollover risks. Domestically, a sharper-than-anticipated decline in the working age population could exacerbate labor shortages, fuel inflation, necessitate a tighter monetary policy stance, and dampen growth prospects. On the upside, the sustained implementation of the EU reform agenda could boost productivity and growth.