Albania Charts a Path to Economic Modernization Amid Global Shifts

Albania is embracing a new era of industrial policy, as highlighted during the launch of the EBRD Transition Report 2024-25, reflecting a clear response to an evolving global economic landscape and the increasing importance of innovation and diversification.

The latest report underscores that traditional approaches to industrial development are no longer adequate in the face of rising geopolitical tensions, supply chain pressures, and demographic challenges. With the costs of global trade increasing and developed economies prioritizing investments in clean technologies, countries like Albania must rethink growth strategies. The report points to the need for dynamic industrial policies that foster not just existing sectors, but also prioritize high-potential industries of the future—particularly in digital and globally tradable services like IT, logistics, and data analytics. Recent reforms have yielded positive outcomes, including sustained GDP growth, declining unemployment, and rising private consumption, but officials stress that deeper investments in education, digital infrastructure, and institutional capacity are now crucial.

Aligning with European integration remains a central goal, with Albania’s increasing trade overlap with the EU and initiatives like SEPA lowering transaction costs and supporting market convergence. At the same time, the country is encouraged to ensure inclusiveness and sustainability, designing policies that balance national competitive advantages with local needs, and supporting dynamic firms through strategic state aid and financial tools.

The Bank of Albania’s strong focus on macroeconomic stability, financial innovation, and inclusive banking services underpins these ambitions, providing a steady foundation for long-term investment and development. As the country steers toward European standards, this moment marks a critical opportunity for Albania to secure sustainable growth and unlock new competitive strengths in a rapidly changing world.