The Bank of Albania kept its policy rate unchanged at 2.5% on December 17, marking the fourth consecutive meeting pause. The overnight lending and deposit rates were also held steady at 3.5% and 1.5%, respectively. The economy maintained steady growth in the second half of 2025, driven by robust consumption, investment, and service exports, with tourism as a notable contributor. Inflation remained well-contained, with the CPI averaging 2.2% in October–November, slightly below third-quarter levels, as food, energy, and housing price pressures eased, while core inflation held steady at 3.1–3.5%. Unemployment rate eased to a one-year low of 8.1% in Q3 2025. Looking ahead, inflation is expected to return to the 3% target by Q2 2026, with risks broadly balanced between potential upward pressures from geopolitical tensions and downside risks from slower growth among key trading partners.
