Albania, an upper-middle-income country, continued to demonstrate progress and reform momentum in 2025, despite ongoing structural challenges, demographic pressures and global challenges. Macroeconomic performance remained robust and increasingly stable. Nominal Gross Domestic Product (GDP) reached United States Dollars (USD) 29.9 billion, while nominal GDP per capita rose sharply to USD 11,108, underscoring the country’s steady convergence towards higher income levels. Real GDP growth moderated to 3.36%, reflecting post-pandemic normalization, while inflation remained at 2.68%.
Prudent fiscal management continued to yield results, with general government gross debt declining to 54.1% of GDP, strengthening macro-fiscal sustainability and policy credibility. of 2011. The demographic shift is shrinking the labour force and intensifying pressures on pensions, healthcare and social protection systems. Public investments in education (2.4% of GDP) and health (2.8% of GDP) remain well below European Union (EU) benchmarks (~5% for education and >7% for health), constraining Albania’s capacity to build and protect human capital. Significant gains were recorded in education outcomes: the upper secondary net enrolment rate reached 98.72% in 2024, and the number of out-of-school primary-age children fell sharply to 617, reflecting a major progress in access and retention. Youth labour market outcomes also improved, with declining rates of those not in employment, education or training (NEET) and rising female labour force participation, though skills mismatches and school-to-work transitions remain key challenges.
State for Artificial Intelligence Diella and the expansion of gender-responsive budgeting (GRB), now covering 59% of public programmes, strengthening inclusive public financial management. The country EU accession process accelerated markedly in 2025, becoming an even stronger anchor for reforms. In November, Albania completed the opening of all six negotiating clusters and all chapters, positioning the country among the frontrunners in the enlargement process, with negotiations targeted for completion by 2027 and EU membership envisioned by 2030. Alignment with the EU Growth Plan for the Western Balkans and the National Reform Agenda increasingly shapes national policy priorities. Financial and regulatory integration advanced further with Albania’s participation in the European Automated Clearing House Association and entry into Single Euro Payments Area, strengthening connectivity with the EU single market.
Growth remained driven primarily by services, especially tourism and real estate, while agriculture and industry continued to face headwinds, highlighting the need for further productivity-enhancing structural transformation. The private sector remains dominated by micro, small and medium enterprises, employing more than 80% of the workforce, while informality remains significant. Unemployment declined gradually, though youth and long-term unemployment remain high. Poverty affects around 19% of the population, with 36.5% vulnerable people falling into poverty, particularly children and women.
Demographic trends remain a critical long-term challenge. Declining fertility rates and sustained emigration has resulted in a cumulative population decline of more than 420,000 according to the 2023 Census compared with that of 2011. The demographic shift is shrinking the labour force and intensifying pressures on pensions, healthcare and social protection systems. Public investments in education (2.4% of GDP) and health (2.8% of GDP) remain well below European Union (EU) benchmarks (~5% for education and >7% for health), constraining Albania’s capacity to build and protect human capital. Significant gains were recorded in education outcomes: the upper secondary net enrolment rate reached 98.72% in 2024, and the number of out-of-school primary-age children fell sharply to 617, reflecting a major progress in access and retention. Youth labour market outcomes also improved, with declining rates of those not in employment, education or training (NEET) and rising female labour force participation, though skills mismatches and school-to-work transitions remain key challenges.
Governance reforms advanced further in 2025, supporting transparency, accountability and EU accession priorities. Implementation of the 2024–2030 Anti-Corruption Strategy continued alongside judicial and rule-of-law reforms, building on the vetting process and justice sector restructuring. Albania recorded a notable improvement in the Corruption Perceptions Index, rising from 98th in 2023 to 80th in 2024, reflecting perceived progress in anti-corruption efforts, though challenges remain in institutional trust, enforcement capacity and inter-agency coordination. Risks related to money laundering and illicit financial flows, particularly in cash-intensive sectors such as construction and tourism, remain an important concern. Digital governance innovations featured prominently, including the introduction of the Minister of State for Artificial Intelligence Diella and the expansion of gender-responsive budgeting (GRB), now covering 59% of public programmes, strengthening inclusive public financial management. The country EU accession process accelerated markedly in 2025, becoming an even stronger anchor for reforms. In November, Albania completed the opening of all six negotiating clusters and all chapters, positioning the country among the frontrunners in the enlargement process, with negotiations targeted for completion by 2027 and EU membership envisioned by 2030. Alignment with the EU Growth Plan for the Western Balkans and the National Reform Agenda increasingly shapes national policy priorities. Financial and regulatory integration advanced further with Albania’s participation in the European Automated Clearing House Association and entry into Single Euro Payments Area, strengthening connectivity with the EU single market.
On the international stage, Albania elevated further its diplomatic profile, showing leadership through its diplomatic posts in both Geneva and New York, as well as at home. Hosting the 6th European Political Community Summit in Tirana underscored the country’s growing convening power and regional role. Albania continued to align closely with EU foreign and security policy positions, marked 70 years of United Nations (UN) membership and strengthened global efforts including through active representation in the UN Human Rights Council and at the Second Global Summit for Social Development held in Doha, Qatar. Together, these developments reflect the country’s increasingly active role in multilateral diplomacy and regional stability, reinforcing its international standing alongside accelerated EU integration.
1. Figures for recent years, depending on the source, are still mostly projections. 2. International Monetary Fund, World Economic Outlook database, October 2025. 3. Source 1, Source 2, Source 3, Source 4, UNICEF, Other online sources. 4. The break in population figures is on account of figures prior to 2024 being INSTAT estimates, while the 2024 figure is based on the latest national census. 5. Source 1, Source 2, Source 3, Source 4. 6. NEET: Not In Employment, Education Or Training
