Albania Interest Rate

The Bank of Albania kept its policy rate unchanged at 2.5% on November 5, marking the third consecutive monthly pause, with overnight lending and deposit rates steady at 3.5% and 1.5%, respectively. Non-harmonized inflation averaged 2.4% in Q3 2025, edging up from the prior quarter yet staying below the 3% target, driven by rising rents and higher services prices, while food inflation eased. Inflation is expected to reach the target in H1 2026. The economy remained strong, with GDP growing 3.6% in the first half of the year, supported by higher household consumption, private investment, and services exports. Employment and wages also increased, while the unemployment rate fell to a historic low of 8.5%. However, trade tensions and geopolitical risks pose downside pressures, and labor market tightness coupled with rapid wage growth could push inflation above forecasts.