In remarks to Parliament presenting its 2025 Annual Report, the Bank of Albania said Albania preserved monetary and financial stability in 2025, with gross domestic product growth of 3.8 percent, average consumer price inflation of 2.2 percent and a stronger banking sector. The bank highlighted an easing monetary policy stance, including a July cut in the policy rate to 2.5 percent and a greater presence in the domestic foreign exchange market to smooth short-term exchange rate volatility. It also pointed to payments reforms that culminated in Albania joining the Single Euro Payments Area and starting SEPA transactions in October 2025. The report linked the macroeconomic outcome to stronger private-sector balance sheets, tourism income, favorable financing conditions and faster credit growth. Private nonagricultural employment rose 5.7 percent and wages 8.5 percent. The current account deficit fell to 0.7 percent of gross domestic product, the budget deficit to 1.8 percent and public debt to 52.9 percent, while foreign reserves reached EUR 7.3 billion. In banking, the capital adequacy ratio stood at 20.36 percent, return on assets at 1.64 percent, return on equity at 15.94 percent and the nonperforming loan ratio fell to 3.8 percent. To contain systemic risk, the central bank imposed upper limits on loan-to-value and debt service-to-income ratios for residential real estate exposures, while continuing work on supervisory equivalence with the European Banking Authority, new banking and payments legislation, Moneyval follow-up and cyber-risk alignment with the Digital Operational Resilience Act. The bank also said the resolution fund exceeded ALL 7 billion at end-2025, around 80 percent of its 2027 target. Looking ahead, the Bank of Albania said it will continue prudential and legal reforms, including full alignment of its framework with European Union rules and work on a TIPS-clone real-time payments platform. It also said it is monitoring the rise in international oil prices in 2026 as a negative supply shock, which it currently assesses as limited and short term for Albania, and will act if needed to prevent second-round effects on inflation.
Bank of Albania2026-06-12
Bank of Albania presents 2025 annual report outlining 3.8 percent growth 2.2 percent inflation and SEPA launch
Presenting its 2025 Annual Report to Parliament, the Bank of Albania said the economy grew 3.8 percent, inflation averaged 2.2 percent and the policy rate was cut to 2.5 percent, while SEPA transactions began in October 2025. It also reported strong bank capital and liquidity, a nonperforming loan ratio of 3.8 percent, and continued work on EU regulatory alignment and real-time payments infrastructure.