The Albanian economy is following the growing trend this year and is expected to be optimistic, leaving behind the countries of the region.

The Bank of Albania, in the recently published Financial Stability report, analyzes the progress of the economy in the countries of the Western Balkans, where it turns out that our country will have the highest economic growth. "The expectations are that during 2024 the economic growth in Albania will reach the level of 3.8%, leaving behind Serbia, North Macedonia, and Montenegro. It is estimated that the countries of the region will have an economic growth below 3% excluding Serbia," stated the Bank of Albania report.

According to the central bank, the economic growth has had a wide base according to the sectors, but the strongest contribution has been given by the service sector directly related to tourism, the increase in foreign investments. The labor market was characterized by positive developments such as the increase in employment, the decrease in the unemployment rate, and the increase in wages in the private and state sectors.

Albania ranks second in the region, after Serbia, in terms of the lowest unemployment rate, which at the end of 2023 is 10.7%.

The central bank notes that the economy in the countries of the Western Balkans grew by an average of 3.1% last year. Almost all countries registered positive growth of the Gross Domestic Product mainly supported by the strengthening of the domestic demand and the increase in service exports focused on the tourism activity. The expansion of economic activity contributed to the increase of budget revenues and the improvement of fiscal balances.

This progress has created space for the further reduction of public debt about GDP in the entire region, where Albania and Montenegro have the highest levels, respectively 59.2% and 60.2%. Credit has also increased, which continues to support the expansion of economic activity in almost all countries of the region, but at a somewhat slower pace compared to a year ago.

Meanwhile, according to the recent report of the International Monetary Fund (IMF), Albania's economy is expected to grow by 3.1% in 2024, slowing down from 3.3% expansion last year, decreasing its October forecast for 2024 by 0.2 percentage points (pp).

In 2025, Albania's gross domestic product (GDP) will increase by 3.4%, the IMF said in the April 2024 edition of its World Economic Outlook report.

Average consumer price inflation in Albania is forecast to abate to 3.5% in 2024 and 3% in 2025, from 4.8% last year, the IMF said. The country is projected to close in 2024 with a current account deficit of 3.8% of GDP, a tad higher compared to 3.7% in 2023.

The IMF also said it expects the economy of the Emerging and Developing Europe area will expand by 3.1% in 2024, increasing its October forecast by 0.9 pp. The economic output of the region grew by an estimated 3.2% last year.