17.12.202515:55:33UTC+00Albania Holds Policy Rate at 2.5%

The Bank of Albania opted to maintain its policy rate at 2.5% on December 17, marking a continued stance for the fourth meeting in succession. Accompanying this decision, the overnight lending and deposit rates remained constant at 3.5% and 1.5%, respectively. During the second half of 2025, the Albanian economy demonstrated sustained growth, largely fueled by robust consumer spending, substantial investments, and strong service exports, with the tourism sector playing a significant role. Inflation was effectively managed, with the Consumer Price Index averaging 2.2% in October and November, slightly lower than the third quarter figures, as the pressures from food, energy, and housing prices decreased. Core inflation stayed steady within the 3.1% to 3.5% range. The unemployment rate declined to 8.1% in the third quarter of 2025, marking its lowest point in a year and continuing at historically low levels. Looking forward, inflation is anticipated to realign with the 3% target by the second quarter of 2026. Risks remain fairly balanced, with potential upward pressures from geopolitical instability and potential downside risks due to slower growth among major trading partners.