Although Albania averaged about 4.4% annual economic growth during 2000–2024, the Albanian economy has not fully exploited its potential to narrow the development gap with the European Union.

In its October 2026 report, "Regional Economic Outlook: Europe – Choosing Economic Growth: Reforms for Innovation, Expansion, and Sustainability," the International Monetary Fund (IMF) notes that the countries of the Western Balkans, including Albania, have significant opportunities to accelerate economic convergence - particularly through reforms that boost productivity and by leveraging the benefits of European integration.

In a chart titled "Unrealized Gains from Convergence: Moldova and the Western Balkans," the IMF compares the average annual growth of European economies between 2000 and 2024 against their initial levels of Gross Domestic Product (GDP) per capita. The analysis is based on the principle of economic convergence, which posits that lower-income countries can grow faster than developed economies by leveraging technology, capital, and production practices already present in wealthier nations.

In 2000, Albania ranked among the European economies with the lowest initial GDP per capita. However, over the subsequent 24 years, the pace of economic growth has not been sufficiently high to fully realize the potential for catching up with more developed countries.

As shown in the chart, Albania falls below the line representing the relationship between initial income levels and average economic growth. This suggests that, given the low starting point, the Albanian economy could have achieved a faster rate of growth.

The comparison with countries in Central and Eastern Europe is particularly telling. Lithuania, which had a higher GDP per capita than Albania in 2000, achieved an average annual growth rate of approximately 4.6% - surpassing Albania’s rate of 4.4%. Romania and Bulgaria, which joined the European Union in 2007, also recorded high growth rates - approximately 4.2% and 4.1% per year, respectively - even though their initial level of development was higher than Albania’s.

Within the Western Balkans, Albania experienced one of the highest growth rates during the period under analysis. Serbia recorded an average of about 3.7% per year, followed by Kosovo at 3.5%, Bosnia and Herzegovina at 3.4%, North Macedonia at 2.9%, and Montenegro at 2.8%.

Nevertheless, Albania’s relatively better performance compared to other countries in the region has not been sufficient to bridge the significant development gap with EU economies. This is one of the findings illustrated by an IMF chart, in which the Western Balkan countries and Moldova generally fall below the expected correlation between initial income levels and economic growth.

Maintaining competitiveness requires more reliable institutions, a more highly skilled workforce, greater private investment, and a shift toward activities with higher value-added. The IMF also warns that expansionary fiscal policies, which have been pursued for a long time in some countries, must be adjusted to ensure the sustainability of public finances.