By the Council’s Own Reading: Where Albania Stands in the Regional Cohort

The Council does not rank economies, but its own data show Albania delivering the most balanced macroeconomic profile in the Western Balkans in 2025.

by Ardit Rada (Tirana)

The Council of the European Union convened the annual Economic and Financial Dialogue with regional partners in Brussels today. The draft Joint Conclusions, endorsed by the Economic and Financial Committee on 24 April, run to thirty-eight pages and assess eight economies: Albania, Bosnia and Herzegovina, Kosovo, Moldova, Montenegro, North Macedonia, Serbia, and Türkiye. The document is a calibrated instrument. Its language is diplomatic by design, its gradations matter, and its comparative reading, when assembled across chapters, produces a finding the Council itself does not state in summary form. The Council does not rank performance. But a comparative reading of the chapters places Albania among the strongest macroeconomic performers in the cohort, and identifies it as the only economy whose 2025 readings combine a sub-target fiscal outcome, a falling debt ratio, inflation at central bank anchor, a sound and well-capitalised banking sector, and growth above 3.5 percent simultaneously.

That comparison is constructed rather than supplied; the document is the source, the synthesis is editorial. The qualifications it requires are also in the document, and they belong in any honest reading. Both belong in the same piece.

Begin with the compliance rating on last year’s policy guidance. Albania is rated “partial.” So are Kosovo, Moldova, Montenegro, Serbia, and Türkiye. Bosnia and North Macedonia are rated “limited.” In the Council’s register, “limited” is the worse of the two grades, and the gradation is not a courtesy. Albania sits in the larger cohort, with the better grade. That is the floor of the comparative.

The macroeconomic readout sharpens the picture. Albania’s 2025 growth came in at 3.7 percent, supported by what the Council describes as “strong domestic demand,” “robust private consumption,” and “rising employment.” Kosovo recorded 3.6 percent, with the Council rating its forward 5.4 percent ERP projection as “optimistic.” North Macedonia recorded 3.5 percent. Türkiye 3.6 percent, but with average inflation of 34.9 percent. Serbia decelerated sharply to 2 percent, “lower than expected,” in a passage where the Council records that “domestic political instability and global uncertainties concerning tariffs and trade have affected consumer and business confidence and spending.” Montenegro 2.7 percent. Bosnia 2 percent. Moldova 2.4 percent, recovering from drought-induced stagnation in 2024.

Albanian inflation averaged 2.2 percent in 2025, the lowest in the cohort by a wide margin. North Macedonia ran at 4.1 percent, with the Council citing “sticky core inflation” hampering disinflation. Montenegro 3.9 percent. Kosovo 3.9 percent. Moldova reached 9.1 percent at the start of 2025 before subsiding to the central bank’s target band only in January 2026. Serbia stayed within its 3 percent band partly through “the government’s temporary intervention in retail prices,” a measure the Council notes “may worsen the business environment and does not address underlying price pressures.” Türkiye at 34.9 percent average. The Bank of Albania, by contrast, has held rates near anchor since cutting to 2.5 percent in July 2025, in a low-imported-inflation environment that prompted only “non-regular foreign-exchange interventions.”

The fiscal readings deserve the most careful comparative handling. Bosnia recorded the lowest headline deficit in the cohort at 0.3 percent of GDP, but the Council attributes that outcome to “revenue-increasing one-off effects” that “are not expected to materialise again in 2026,” and flags that the projected consolidation path is “not supported by concrete measures” and is “not in line with previous recommendations.” The headline number is the best in the cohort; the structural reading is among the most fragile. Kosovo at 0.8 percent, again from capital underexecution. Albania closed at 1.8 percent against a 2.4 target, with public debt falling to 53 percent of GDP and projected to keep declining through 2028. Serbia at 2.4 percent in 2025 is projected to widen to 3 in 2026 and 2027, with the Council explicitly calling the stance “relatively loose” against an inflationary backdrop. Montenegro overshot its 3.5 percent deficit target by 0.8 points, with its debt ratio projected to remain “above the fiscal rule’s limit” at 63.8 percent in 2028. North Macedonia’s debt is set to peak at 62.1 percent in 2027, with average financing needs of 9.7 percent of GDP through 2028. Moldova’s deficit reached 4 percent in 2025 and is set to widen to 5.7 percent in 2026, with debt rising to 46 percent by 2028. Albania’s combination of sub-target outcome and declining debt ratio is unique in the cohort; Bosnia’s lower deficit comes with a structural caveat the Council itself supplies.

The Council attributes Albania’s revenue strength to “robust economic activity, measures to curb informality and the continued implementation of the Medium-Term Revenue Strategy.” Kosovo’s chapter records a comparable attribution to “improved tax compliance and some formalisation gains.” Montenegro, Bosnia, and North Macedonia do not receive equivalent framing. The signal worth reading is that Albania’s revenue performance is partly programmatic, not purely cyclical, and that Kosovo is the comparable case in the cohort on this specific dimension.

Statistical infrastructure produces a similar gradient. The Council records that Albania “completed a benchmark revision of national accounts,” “improved its coverage of some accounts,” “continued to improve the application of the accrual principle in the excessive deficit procedure and in government finance statistics,” and “successfully implemented the new European business statistics data transmission format.” Gaps remain, and the Council names them. Compare to Kosovo, where “no progress has been made in reporting excessive deficit procedure notification tables and government finance statistics, with no data transmitted to Eurostat during 2024 and 2025,” with “extensive application of confidentiality flags preventing publication of the data.” Or Bosnia, which “suspended the transmission of excessive deficit procedure and government finance statistics data to Eurostat in 2025.” Albania is transmitting, with improvements. Two of its peers have, in different ways, gone dark on core fiscal data to the EU statistical apparatus.

The qualifications are real and require honest handling. The Council’s instruction on the National Development Bank is unusually direct: the institution will operate as a deposit-taker “without falling under the supervisory remit of the Bank of Albania or the deposit insurance scheme,” and the Council has placed on the record, before the bank exists, that it must operate under “a transparent operational framework that mitigates fiscal and financial risks and moral hazard.” That phrasing does not appear in any other chapter in the document. The property tax instruction has hardened: the Council asks for “shorter transition periods,” language that did not appear last year. The fiscal council file remains unfinished, awaiting Commission comments on draft legislation; that places Albania alongside Montenegro, where members must still be appointed, and ahead of North Macedonia, where the council exists but lacks staff and independence. The forgiveness of old tax and customs debt is named in the Albanian chapter as creating long-term compliance risk; that specific instruction appears nowhere else. And the revenue ratio at 28.6 percent of GDP is flagged as “low compared to peers,” which is the structural weakness behind the otherwise strong fiscal numbers. Albania runs a low-revenue, low-deficit fiscal model. The headline numbers look good in part because the state is small.

None of those qualifications negates the comparative. They sit alongside it. The document is what it is: an instrument of jointly agreed policy guidance, calibrated to record both performance and remaining work. On performance, by a comparative reading of all eight chapters, no other economy in the regional cohort produced Albania’s combination of indicators in 2025. On remaining work, the National Development Bank, property taxation, the fiscal council, and the structural revenue base are the four files where the Council’s instructions are sharpest.

Read together, the chapter does not deliver a verdict. It supplies the material for one. The defensible reading, on this evidence, is that Albania’s 2025 economic performance produced the most balanced combination of indicators in the cohort, and that the next year of work is about whether the institutional architecture catches up to the numbers.

Ardit Rada is a staff writer at the Tirana Examiner.