The Bank of Albania left its benchmark interest rate unchanged at 2.5% at its November 2026 meeting, judging the current monetary stance to be appropriate in the context of solid economic growth and inflation close to target. Annual inflation eased to 2.9% in September from 3.2% in August, reflecting a slowdown in rental price increases, though rising agricultural and food prices continued to generate upward pressure.
Economic activity remained robust, with GDP expanding by 3.6% in the first half of 2026, driven by household consumption, investment, exports, and gains in employment and wages. Credit growth was also strong, reaching 15.5% in the third quarter.
The central bank expects inflation to temporarily exceed its 3% target, mainly due to higher energy costs and external inflationary pressures, before converging back to target in 2028. At the same time, geopolitical tensions and uncertainty surrounding the new fiscal package are seen as key risk factors. The Bank of Albania reiterated that future policy decisions will depend on the inflation outlook, external developments, and risks to price stability.
