Public debt across the Western Balkans generally followed a downward trend after reaching elevated levels at the beginning of the decade, although the trajectory has varied considerably across economies.

By 2025, Albania, Serbia, Kosovo and North Macedonia had reduced their debt-to-GDP ratios, while Montenegro’s sharp decline in the earlier years was followed by a renewed increase. Public debt also began to rise moderately in Bosnia and Herzegovina.

According to European Commission data, Montenegro and Albania recorded the highest public debt ratios in the region in 2025. Montenegro’s debt stood at 63.5% of GDP, while Albania’s reached 52.9%. They were followed by North Macedonia at 51.6%, Serbia at 44.4%, Bosnia and Herzegovina at 27%, and Kosovo at 16.5%.

Despite remaining among the region’s most indebted economies, Albania recorded the largest reduction in public debt over the period under review. The debt-to-GDP ratio declined from 74.1% in 2021 to 64.1% in 2022 and 57.6% in 2023. The downward trend continued, with the ratio falling to 54.2% in 2024 and 52.9% in 2025.

The European Commission expects the decline to continue. General government debt is projected to fall to 52.3% of GDP in 2026 and to 50.3% in 2027.

In the first quarter of 2026, the public debt ratio dropped to 48.8% of GDP, more than 5 percentage points lower than a year earlier. The European Commission noted that the decline reflected both a reduction in the nominal debt stock and an increase in nominal GDP, including updated GDP estimates by the Ministry of Finance.

Montenegro continues to carry the highest public debt burden in the Western Balkans. Its debt-to-GDP ratio fell from 84% in 2021 to 70.8% in 2022 and 59.3% in 2023.

The trend subsequently reversed. Public debt increased to 61.3% of GDP in 2024 and to 63.5% in 2025. For 2026, the European Commission forecasts a further rise to 69.4%, before the ratio declines to 64.3% in 2027.

Data for the first quarter of 2026 point to a temporary reduction in the debt ratio to 59% of GDP, from 63.5% at the end of 2025. However, higher expenditure and financing requirements are expected to push the ratio upwards during the remainder of the year.

North Macedonia has not recorded a consistent decline in public debt. The ratio stood at 51.4% of GDP in 2021 and edged down to 49.7% in 2022 and 49.5% in 2023. Debt then increased to 53% of GDP in 2024, before easing to 51.6% in 2025. The European Commission expects the ratio to rise again, reaching 52.5% in 2026 and 53.3% in 2027.

Meanwhile, Kosovo continues to have the lowest level of public debt in the Western Balkans. The debt-to-GDP ratio fell from 21.5% in 2021 to 20% in 2022 and 17.5% in 2023.

The decline continued, with the ratio reaching 16.8% in 2024 and 16.5% in 2025. In the first quarter of 2026, public debt fell further to 15.6% of GDP.