The international credit rating agency Moody's, in its latest review, dated September 18, has upgraded Albania's outlook from "stable" to "positive" and confirmed the country's rating at "Ba3". According to the agency, the positive outlook reflects the strengthening of Albania's fiscal and external positions, as well as the acceleration of the implementation of structural reforms in recent times, within the framework of the European Union accession process, according to an official announcement from the Ministry of Finance.
The confirmation of the “Ba3” rating reflects the solid economic growth performance, moderate levels of public debt, the economy's resilience to a series of shocks in recent years, and the expectation that growth will remain solid over the medium term. Moody's forecasts real GDP growth of 3.6% in 2026 and 3.5% in 2027, noting that the Albanian economy has so far proven resilient to the effects of the conflict in the Middle East, thanks to its almost complete reliance on renewable energy.
The agency emphasizes that the authorities have consistently demonstrated fiscal discipline and that public finances have been progressively strengthened. Albania has recorded primary surpluses in each of the last three years, following the introduction of the fiscal rule requiring the maintenance of a non-negative primary balance. The fiscal deficit in 2025 resulted at 1.8% of GDP, lower than the budgeted level, thanks, among other things, to solid revenue performance.
Moody's expects that, thanks to strong economic growth and controlled fiscal deficits, general government debt will continue to gradually decline, to 50.2% of GDP in 2027, from 52.9% at the end of 2025. This improvement is supported by fiscal reforms, including the implementation of the Medium-Term Revenue Strategy in 2025, improvements in public investment management and compliance with fiscal rules, which require debt to be reduced until it reaches 45% of GDP. The agency also emphasizes that the government's liquidity risks are mitigated by access to financing from the EU and international financial institutions, proactive debt management and a stable domestic financing base.
Albania's external position strengthened significantly in 2025, with the current account deficit narrowing to a record low of 0.7% of GDP, from 2.4% in 2024, thanks to a smaller deficit in goods trade and a higher surplus in services, reflecting strong growth in tourism-related exports. This trend has continued in 2026, despite the shock to energy prices resulting from the Middle East conflict, and Moody's expects the current account deficit to remain low, averaging around 1% of GDP in 2026–2027.
Net foreign direct investment inflows remained substantial, around 5% of GDP in 2025 and the first quarter of 2026, continuing to fully finance, and even over-finance, the current account deficit. Foreign exchange reserves have increased progressively, reaching around €7.9 billion in June 2026, a level that covers significantly more than seven months of imports and constitutes an important hedge against external shocks.
Moody's notes that since the opening of accession negotiations in 2022, Albania has established a significant reform momentum. In May 2026, the country marked a key moment when the EU assessed that Albania had met the milestones of the “Foundations” Chapter Group, which covers democratic institutions, public administration reform, the rule of law and economic criteria. This development enables Albania to start closing the negotiation chapters.
Albania will continue to benefit from EU funding, both through pre-accession instruments and the New Growth Plan for the Western Balkans, under which the indicative allocation for Albania amounts to EUR 922.1 million. The Agency assesses that continued reform progress, supported by this funding, has the potential to further strengthen the country's institutional and governance profile.
This outlook upgrade by Moody's and reaffirmation of the rating is a very important indicator of Albania's macroeconomic stability and continued progress in structural reforms, sending a positive signal to international investors and supporting the country's long-term European integration objectives.
