In Governor Gent Sejko’s address to Parliament presenting the Bank of Albania’s Annual Report 2025, the central bank said it met its price stability and financial stability objectives during the year. The report says Albania’s economy grew by 3.8% in 2025, inflation averaged 2.2% and remained below but close to target, and the Bank of Albania eased monetary policy by cutting its policy rate in July to 2.5% while also remaining active in the foreign exchange market to manage short-term exchange rate deviations as the lek appreciated. Those conditions were reflected in lower market rates, ample liquidity and 14.4% growth in private-sector credit, led by lek-denominated lending for business investment. The report also points to stronger external, fiscal and banking-sector indicators. The current account deficit narrowed to 0.7% of gross domestic product, public debt fell to 52.9% of gross domestic product, external debt declined to 38% of gross domestic product and international reserves rose to EUR 7.3 billion. In banking, the capital adequacy ratio reached 20.36%, the non-performing loan ratio fell to 3.8%, return on assets was 1.64% and return on equity was 15.94%. The Bank of Albania said it added loan-to-value and debt-service-to-income caps to limit residential real estate risks, continued work on a new banking law and amendments to the payment services law, advanced alignment with European Union standards including DORA, and reported that the Resolution Fund exceeded ALL 7 billion, around 80% of its 2027 target. On payments, it highlighted Albania’s operationalisation of SEPA in October 2025, with about 166,000 SEPA transactions worth EUR 2.2 billion processed in the first quarter of operation. Looking ahead, the Bank of Albania said it will closely monitor inflation in light of higher international oil prices in 2026 and stands ready to act to prevent second-round effects. It also said it will continue prudential, payments and legal reforms tied to European Union alignment and accession preparations.
Bank of Albania2026-06-12
Bank of Albania presents 2025 annual report with 3.8% growth 2.2% inflation and a policy rate cut to 2.5%
Presenting its 2025 annual report to Parliament, the Bank of Albania said the economy grew 3.8%, inflation averaged 2.2% and the policy rate was cut to 2.5% as the central bank eased monetary policy. It also reported a strong banking sector, new mortgage risk caps, and further progress on EU regulatory alignment and payments modernisation, including SEPA operations from October 2025. The bank said it will keep monitoring 2026 inflation risks linked to higher oil prices.