The increase of 69 firms marked a slowdown compared with 349 new enterprises added in 2023, according to the report.

Despite accounting for around 3% of total businesses, foreign-owned firms generated 18.8% of total employment and 20.4% of net sales nationwide, highlighting their outsized role in the economy.

The European Union remained the main source of foreign capital, with EU-based companies making up 60.7% of all foreign enterprises. Italy was the largest single partner, with 2,930 firms employing 46.8% of the workforce in the sector.

It was followed by Kosovo with 582 enterprises and Türkiye with 453, while other Western Balkan countries accounted for 11.9%.

According to INSTAT, foreign investment was concentrated in services and industry. Manufacturing remained the largest employer, while trade generated the highest turnover, accounting for 36.7% of net sales.

In the extractive industry, non-European countries dominated, controlling 87.4% of net sales. China held a leading position with a 63.7% share, largely linked to oil extraction activities.

EU capital remained dominant in other sectors, including construction (58.5%), energy (48.0%) and transport (69.9%).

Although around 86% of foreign enterprises were small, employing between one and nine people, large firms played a disproportionate role. A total of 69 large enterprises accounted for 38.6% of employment and 31.3% of net sales within the foreign-owned business segment.

Total foreign direct investment stock reached 15.4 billion euros at the end of 2024, with EU countries accounting for 55.2%. On a country basis, the Netherlands (16.5%) and Switzerland (14.7%) were the largest investors.

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Data from the institute of statistics show that a total of 15,970 new enterprises were registered in 2024 – a notable rise from 13,636 registered in 2023 -, reflecting an upward trend in business activity and entrepreneurial dynamism.

The data indicates enhanced economic activity, with implications for job creation and the expansion of productive capacities.

Service-based enterprises continued to dominate the business landscape, accounting for 86% of all active enterprises, underscoring the country’s ongoing shift toward a service-oriented economy. In contrast, only 14% of enterprises operate in the industrial and manufacturing sectors.

Large enterprises – defined as those employing over 50 people – made up just 1.5% of the total, highlighting the predominance of small and medium-sized businesses in Albania’s economy.

Foreign and joint ventures represented 5.3% of all enterprises. Of these, 56.6% had Italian ownership, followed by businesses from Kosovo (8.3%) and Türkiye (6.5%).

Women-led businesses accounted for 31.4% of total enterprises in 2024, up slightly from 31.2% in 2023 – a positive sign of increasing female participation in business leadership and a step forward in gender equality in the labor market.

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Shehu highlighted that the quality of loan portfolio has improved in the second half of the past year, with the NPLs ratio dropping to 4.2%, the lowest in the past 15 years.

The central bank official also underlined that the banking sector’s exposure to the market risk, mainly due to the foreign exchange market and interest rates, remains under control.

“The banking sector has grown to account for 93.2% in terms of its weight of Gross Domestic Product. The increase in lending and investment in government securities have mainly contributed to the performance of the banking sector’s assets,” Shehu added.

According to him, bank profits expanded in 2024, mainly from net interest income in the form of fees, commission charges or income from improving the position in international investments.

“Albanian economy grew 4.1% year-on-year, mainly supported by the domestic consumption and private sector investments,” he said.

Shehu warned that recent international developments and the trade war may affect consumption and investment growth.

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Central Bank said in its Financial Stability Report for the second half of 2024 that the country’s economic growth was associated with further fall in unemployment rate and increase in employment and wages.

“Fiscal policy maintained a consolidation trend for most of the year leading to significant growth in tax revenues. While inflationary pressures declined, the Bank of Albania eased its monetary policy,” the Report notes.

According to Central Bank, financial activity also expanded.

“Bank deposits and loans expanded despite further appreciation of the national currency, capitalization remained at good levels, while banks’ profits improved significantly,” BoA emphasized.

However, Central Bank underlined that risks to economic and financial developments in the country remain present, linking them to the uncertainty and impact of international developments.

“In this context, it is important that the economic and financial policies of public authorities and the actions of market stakeholders aim to preserve the financial reserves that support the proper operation of their activities,” the BoA report states.

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Central Bank said in its latest Financial Stability Report for the second half of 2024 that home prices also increased 23.6% compared to the first half of the previous year.

The real estate price index in Tirana rose 26.2% compared to the previous half of 2024 and 56% compared to the same period of 2023.

The country’s banking sector has kept supporting purchase of residential real estate by individuals and businesses by issuing around 210 billion lek in loans for this segment, increasing by 6%.

According to central bank, 20% of the properties sold in the second half of the past year were bought by foreign nationals.

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Dumani told the Council that SPAK stepped up investigations into high-level officials in 2024, with 33 former public officials investigated and 19 referred to court, and ten of them already convicted.

“Our investigations have uncovered sophisticated corruption schemes. The increased number of suspected corruption cases reported by ordinary citizens is indicator of growing trust in SPAK. We are committed to fighting without compromise,” Dumani said, underlining that the number of cases reported by the State Police has declined.

SPAK chief underlined that the anticorruption and anticrime prosecution body was pursuing complex cases involving institutional abuse, money laundering, and links to organized crime. He noted that ten senior officials were convicted with final rulings this year, signaling growing pressure on political impunity.

Dumani said that SPAK’s investigation into organized crime cases have pursued an upward trend during last year, reporting a 18.8% rise in criminal cases over 2023.

He also highlighted that SPAK has investigated a significant number of senior officials.

“Number of investigation cases involving money laundering has risen 34% compared to 2023 and it has tripled compared to 2021,” he added.

Dumano also announced that assets worth 65.5 million euros were seized or confiscated, registering a 59.7% increase year-on-year. He added that the agency had also signed three new international cooperation agreements and saw a sharp rise in mutual legal assistance requests.

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According to ERE’s annual report, the total installed capacity of power generation until December 2024 was estimated at around 3.213 MW, up by around 537 MW compared with 2023.

The increase in installed capacity throughout the year is mainly a result of the growth in renewable sources of photovoltaic electricity.

According to the report, the electricity production capacity of the public company KESH is 1.563 MW and it accounts for about 48.6% of the country’s installed capacity, while other electricity producers generate 1.650 MW, accounting for about 51.4% of the total capacity.

Power plants are connected to both the electricity transmission network and the distribution network.

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INSTAT said in its latest report that tourism, construction sector, wage hike and employment mainly contributed to the GDP growth last year.

The sectors contributing to economic growth were: “Public administration, Education and Health” by +1.44 percentage point, “Trade, Transport, Accommodation and Food Services” by +0.81 percentage point, “Real estate activity” by +0.50 percentage point, “Construction” by +0.25 percentage point, “Arts, entertainment and recreation services, other services professional services” by + 0.19 percentage point, “Financial and insurance services” by +0.03 percentage point, “Professional services and Administrative services” +0.01 percentage point.

According to INSTAT, the activities: “Industry, Electricity and Water” contributed by -0.85 percentage point, “Agriculture, Forestry and Fishing” by -0.35 percentage point and “Information and Communication” -0.01 percentage point. “Net taxes on products” contributed positively by +1.61 percentage points.

Exports and services decreased by 1.73%, while imports of goods and services increased by 3.12 %.

INSTAT said that Albania’s GDP rose 3.63% in real terms in fourth quarter of 2024.

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Data from the Bank of Albania show that the net revenue from tourism industry rose 19.6% year-on-year to 5 billion euros 2024.

Official data also confirm the growing influx of foreign visitors as the country is becoming a year-round destination.

According to central bank, revenue from tourism sector reached over one billion euros in the second and the fourth quarter of 2024, with 1.16 and 1.13 billion euros respectively, while revenue in the third quarter, which coincides with the peak season, totaled 1.9 billion euros.

BoA said that Albanian and foreign resident travelers spent 612 million euros on their trips abroad.

According to the National Institute of Statistics, INSTAT, more than 11.7 million foreign tourists visited Albania in 2024, with foreign tourist arrivals increasing 15.2% year-on-year.

Tourism development is also contributing to growth, employment and consumption in the country.

The remarkable growth in both inbound and outbound tourism expenditure underscores the importance of the tourism sector as a key driver of economic growth and development in Albania.

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Central bank data show that the real estate sector proved to be a primary attraction for foreign direct investment with a total of 379 million euros, followed by the extraction industry with investments value estimated at 214 million euros, processing industries with 173 million euros and electricity with investments reaching 166 million euros.

In the third quarter of 2024, FDI inflow reached 423 million euros, with reinvested profit accounting for the largest share.

According to central bank, the Netherlands, Italy and Türkiye are top investors in Albania. The increase in FDI underscores Albania’s growing appeal as a destination for international capital.

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