Amid rising living costs and the need for greater social spending, the government has once again earmarked Lek 201 billion (Euro 2.2 billion) for capital investments in 2027, according to preliminary data from the draft budget.

This represents the largest budgetary increase within the expenditure category - up approximately 14.4% compared to the revised 2026 budget. However, while investment funds grow each year, their actual execution is deteriorating at a similar pace. In the first nine months of 2026, only 35.6% of the annual allocation had been spent, leaving roughly Euro 1.2 billion to be utilized in the final three months, local business news provider Monitor reported.

According to the draft budget, capital expenditures for the coming year are projected to be Euro 260 million higher than this year’s planned budget - and 53% higher than in 2025. Public investments will account for 6.9% of the Gross Domestic Product (GDP) and approximately one-fifth of total budgetary expenditures. Of the total fund, Lek 134.8 billion will be financed from domestic sources, and Lek 62.5 billion from foreign financing. The European Union’s Growth Plan alone accounts for Lek 14.1 billion earmarked for capital investments. However, these increasingly high planning figures stand in stark contrast to the institutions' actual capacity to spend these funds in a timely manner and translate them into completed projects.

Data from the Ministry of Finance for the first nine months of 2026 show that capital investments reached only Lek 62.7 billion - just 35.6% of the annual target of Lek 176 billion. This performance highlights a recurring issue in public finance: while substantial funds are allocated for investments each year, the bulk of this spending is pushed toward the end of the year.

During these nine months, capital expenditures reached Lek 62.8 billion against a planned Lek 83.5 billion, representing a 75.2% execution rate. While current expenditures reached 95.7% of the planned amount, nearly a quarter of the funds programmed for public investments remained unspent. Experience from previous years has shown that over 40% of the investment budget is often allocated in December, leading to a heavy concentration of payments within a very short timeframe. This raises questions regarding the efficiency of these expenditures, especially given the absence of the actual projects or deliverables that should have been completed with these funds.

Public investment has consistently accounted for a significant portion of budgetary spending over the years, but it is set to reach its peak in 2027. Next year, investments will represent 20.6 percent of total budgetary expenditure, up from 15.8 percent in 2025.

Yet, even as this category grows, the country continues to face acute infrastructure deficiencies. In a global report on water supply, the World Bank highlighted Albania as a notable case: despite high levels of budgetary funding for the water sector, citizens still suffer from severe water supply shortages, and sewage remains untreated.

Comparable official data indicate that capital investments in Albania are 1.2 to 1.6 percentage points of GDP higher than in other countries in the region. Meanwhile, however, Albania allocates a smaller share of public expenditure to education, healthcare, and social protection.