Albania’s economy is continuing to expand on a stable trajectory, with stronger tax collection, rising employment and increased business activity supporting growth, Finance Minister Petrit Malaj said on July 28, presenting fiscal results for the first half of 2026.

The government expects the economy to grow by 4% this year after gross domestic product expanded 3.7% in the first quarter, above the average growth rate recorded in the Western Balkans and the European Union, Malaj said, according to a ministry statement.

GDP is forecast to reach €29bn by the end of 2026, while per capita income is expected to rise to €12,200 from €11,355 in 2025, he added.

“Albania during the first quarter of 2026 has recorded an economic growth of 3.7%, higher than the average of the Western Balkans, but also of the European Union,” Malaj said.

The minister said budget revenues reached ALL410bn (€4.2bn) in the January-June period, representing 105% of the planned level and exceeding the target by ALL44.5bn. Revenues collected by tax, customs and social and health insurance administrations totalled ALL359.3bn, or ALL7.1bn above plan.

Malaj attributed the increase to improved tax and customs administration rather than higher taxes or an increased fiscal burden.

“During 2025-2026 we have collected a total of €1.2bn more compared to 2024,” he said, adding that the results reflected stronger formalisation of the economy and implementation of the medium-term revenue strategy.

Public spending reached ALL357.8bn in the first half, up ALL24.8bn from a year earlier, with capital expenditure rising 10.2% to ALL36.8bn.

Economic activity also strengthened, with declared business turnover increasing 7% year on year, equivalent to €1.3bn more reported by companies. Turnover rose across major sectors, including trade, up 10%, construction, up 9%, services, up 4%, and production, up 2%.

The number of registered businesses reached 148,270 at the end of June, an increase of more than 12% compared with the same period last year.

Malaj said inflation remained among the lowest in the region, averaging 2.7% in the first six months of 2026, compared with around 4% across the Western Balkans.

Unemployment fell to 8.4% in the first quarter, while average wages increased to €935 from €831 a year earlier. Average public sector wages reached €1,094, while private sector wages rose to €871 from €753.

Foreign direct investment also continued to expand, rising 11.8% year on year in the first quarter to €404mn, with Austria, Italy, the Netherlands, Turkey and Kosovo among the leading sources.

The government’s fiscal package measures also generated additional revenues. The property revaluation programme, launched in February, brought in ALL5bn, while VAT compensation applications from farmers reached ALL587mn.

The finance ministry also reported progress on tax debt forgiveness measures, with more than 100,000 taxpayers and businesses benefiting from cancelled or reduced liabilities.

Malaj said Albania was continuing work to align its fiscal and customs legislation with European Union standards as part of its integration process, with full approximation of the Customs Code expected by September and broader fiscal alignment by the end of the year.