In the second quarter of 2026, Albania recorded the second-lowest economic growth in the Western Balkans, ahead only of Bosnia and Herzegovina.

According to the European Commission’s latest economic report on candidate countries, the Albanian economy expanded by 3.6% year-on-year - matching the region’s weighted average, which reached its fastest growth pace since the second quarter of 2024.

While most economies in the region saw growth accelerate, Albania slowed slightly, from 3.7% in the first quarter to 3.6% in the second. Investment growth slowed notably, rising by only 1.8% - down from 4% in the previous quarter - while other countries in the region accelerated.

“Investment growth continued to slow, falling to 1.8% year-on-year - down from 4.0% in the first quarter of 2026 and 9.9% in the fourth quarter of 2025 - though it remained above the 0.6% level recorded a year earlier,” the report states.

According to the European Commission, economic growth in the Western Balkans was driven primarily by household consumption and investment. Albania recorded the highest growth in private consumption in the region, at 4.6% year-on-year, followed by Kosova at 4.4%. This growth in consumption was supported by strong wage performance, which continued to fuel domestic demand.

However, investment trends present a different picture. Albania was the only country in the Western Balkans where the growth rate of gross fixed capital formation slowed down during the second quarter of the year. In contrast, North Macedonia and Montenegro recorded significant expansion in investment - 16.5% and 26.5%, respectively - driven largely by an increase in public capital expenditure.

Despite a relatively slower pace of economic growth, Albania was among the countries that made the most significant contribution to improving the region's external position. According to the report, Albania’s current account balance - measured over the last four quarters - shifted to a surplus of 0.2% of Gross Domestic Product (GDP) in the second quarter of 2026.

This improvement was supported by an increase in service exports, primarily in tourism, as well as an improvement in the primary income balance - partly due to higher earnings from short-term and cross-border employment abroad.

Albania was also among the countries that saw the most significant growth in foreign exchange reserves compared to the previous year.

At the regional level, the weighted average current account deficit, measured over the last four quarters, narrowed to 4.6% of GDP - a decrease of 0.8 percentage points from the previous year.

This improvement was driven largely by Albania and Serbia.