Foreign Direct Investment growth has slowed this year, after a three-year cycle of relatively high growth rates.

Bank of Albania data show that for the second quarter of 2025, the value of Foreign Direct Investment reached Euro 398 million, an increase of only Euro 1 million compared to the same period a year earlier.

For the entire first six months, the total value of foreign direct investments reached Euro 759 million, with a small increase of 1% (about 8 million euros) compared to the same period last year.

Despite the fact that growth has slowed significantly, foreign direct investment in value is setting a new historical record for the first 6 months of the year.

The growth of foreign investments in the second quarter of the year was also supported by the increase in reinvested profits of existing investors. 52% of total foreign direct investments were reinvested profits.

Even the 6-month progressive data show that reinvested profits continue to hold the main weight in the structure of foreign direct investments.

For the first half of this year, the value of profits reinvested by foreign companies reached Euro 420 million, 6.6% more compared to the same period last year.

Reinvested profits accounted for 55% of the total value of foreign direct investments for the 6 months of 2025.

New capital flows from foreign investors for the 6 months were worth Euro 345 million, with an annual increase of 2.4%.

Data on the distribution of foreign investments by sector during the second quarter have not yet been published. However, the first quarter of this year and, in general, the previous 2-3 years have shown some clear trends.

Foreign direct investment is being supported, in particular, by the real estate sector, but also by the high value of profits reinvested in several sectors of the economy. This includes, in particular, the hydrocarbon extraction industry and the financial sector.

During the first quarter of 2025, foreign exchange inflows in the form of foreign direct investment were mainly concentrated in real estate, at 27%, the financial intermediation sector, at 21%, hydrocarbons, at 14%, energy, at 6%, and transportation, at 4%.

According to data from the Bank of Albania, foreign investments last year amounted to Euro 1.58 billion, up 5.6% compared to the previous year. Real estate brought in almost a quarter of the total value of foreign direct investments for 2024. They reached Euro 350 million, up 17% compared to 2023.