In its analytical report published on Sept. 21, the ratings agency said Albania’s economy had proved resilient to successive shocks in recent years, growing by an average of about 4% annually in real terms between 2022 and 2025.

S&P forecasts real GDP growth of 3.4% in 2026, down from 3.7% in 2025, followed by average annual growth of around 3% in 2027-2029. Growth is expected to be supported by services exports, private consumption and investment.

The country’s external position has strengthened, mainly due to strong tourism performance, while current account deficits narrowed significantly during 2023-2025.

S&P described Albania’s fiscal position as relatively strong compared with emerging markets and forecast a budget deficit of 2% of GDP in 2026, below the government’s 2.3% ceiling. It expects the deficit to average around 2% of GDP through 2029 and noted that Albania has recorded a primary surplus since 2023.

Public debt is projected to fall to 50.5% of GDP by the end of 2029, from 52.9% in 2025.

The agency also highlighted Albania’s progress towards European Union membership, including judicial reform, efforts to combat corruption and organised crime, and the opening of all six negotiating clusters.

Foreign exchange reserves rose to 8.1 billion euros, or 27% of GDP, at the end of July 2026, supported by strong services exports, particularly tourism, and foreign direct investment inflows.

The banking sector remains liquid and well-capitalised, with non-performing loans at 4% at the end of July, well below the 11% level recorded before the pandemic.

S&P’s assessment points to continued economic resilience, prudent fiscal management and a stronger external position, factors that support Albania’s sovereign credit profile.

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