AGP Executive Report

Business Climate: Student-led unrest has entered its sixth day, with clashes and damage to public buildings in Tirana and other cities adding uncertainty for businesses. Growth Outlook: Albania averaged 4.4% annual growth from 2000 to 2024, but the IMF says the country has yet to fully realize its convergence potential; it forecasts 3.5% growth in 2026. Industry and Investment: Construction output rose 36% in four years, while private investment is supporting poultry expansion. Albania has also provisionally closed EU talks on enterprise and industrial policy. Tourism: Overnight stays grew 27% in 2025, the fastest rise in Europe, but tourism intensity remains below the EU average and summer growth is slowing. Manufacturing: Eco Buildings is advancing an expansion of automated wall-panel production.

Economic Outlook: Albania averaged 4.4% annual growth from 2000 to 2024, but the IMF says productivity reforms and deeper European integration are needed to close the gap with the EU. Tourism: Overnight stays rose 27% in 2025, outpacing the EU, but Albania’s tourism intensity remains below the bloc’s average. Growth in registered accommodation also slowed to 10.3% in August, from 35.1% a year earlier. Construction: Building activity expanded 36% from 2020 to 2024, nearly ten times the EU average, driven mainly by housing; growth eased to 4.5% in 2024. Industry and Trade: Albania provisionally closed EU accession talks on enterprise and industrial policy. Travel retailer Lagardère reported strong growth in Albania in the third quarter, alongside gains across its wider European business. Business Climate: As protests and clashes continue in Tirana, the Chamber of Commerce has urged that businesses not become targets of political tensions.

Economic Outlook: Albania’s economy grew about 4.4% a year from 2000 to 2024, but the IMF says it has not fully used its potential to catch up with the EU; productivity reforms and European integration could help. Tourism: Overnight stays rose 27% in 2025, far above the EU’s 1.7%, yet Albania recorded just 4.1 nights per resident versus 7 across the bloc. Growth is cooling: August visitor numbers rose 10.3%, down from 35.1% a year earlier. Construction: Building activity grew 36% from 2020 to 2024, nearly ten times the EU rate, led mainly by homes and apartments; growth slowed to 4.5% in 2024. Agriculture: Private investment has expanded poultry producer Dardha Bio to 13 farms and processing capacity of up to 1,000 birds an hour, while national poultry output fell to 11,400 tonnes in 2024 from 16,800 the year before. EU Integration: Albania provisionally closed negotiations on enterprise and industrial policy, a step toward aligning business rules with the EU. Consumer Rules: A proposed bill would ban fake online reviews and require platforms to disclose paid product rankings.

Business Climate: Violent protests in Tirana have damaged businesses and government buildings; the Tirana Chamber of Commerce has warned that firms must not become targets of political tensions. Consumer Services: A bill before parliament would ban fake online reviews and misleading ratings, require steps to verify customer feedback and disclose paid product rankings. Tourism: Visitor growth in registered accommodation slowed to 10.3% in August, from 35.1% a year earlier. Albania and Azerbaijan are discussing joint tourism initiatives and stronger transport links for 2027. Construction & Infrastructure: Construction activity rose 36% from 2020 to 2024, far above the EU’s 3.8% increase, though annual growth eased to 4.5% in 2024. A €110 million Japan-funded wastewater project in Tirana is moving toward resuming stalled work. Industry & Agriculture: Albania has provisionally closed EU accession talks on enterprise and industrial policy. Private investment has expanded poultry producer Dardha Bio to 13 farms and a processing plant handling up to 1,000 birds an hour; national poultry output fell in 2024.

Consumer Protection: Albania’s proposed bill would ban fake online reviews, require sellers to verify customer ratings and disclose paid placement in search results. Construction: Building activity rose 36% from 2020 to 2024, almost ten times the EU average, though growth slowed to 4.5% in 2024; new housing drove most of the expansion. Tourism: Visitor numbers in registered accommodation grew 10.3% in August, down sharply from 35.1% growth a year earlier. Albania and Azerbaijan are also exploring joint tourism initiatives and better transport links for 2027. Business Climate: The Tirana Chamber of Commerce condemned attacks on businesses during protests, warning that damage threatens jobs, investment and livelihoods. Agriculture: Private investment has helped poultry firm Dardha Bio expand to 13 farms and a processing plant handling up to 1,000 birds an hour, although national poultry output fell in 2024. Infrastructure: Albania has moved to reactivate a Japan-funded €110 million wastewater project in Tirana, stalled for years. EU Industry Policy: Albania provisionally closed accession negotiations on enterprise and industrial policy, a step in its EU membership process.

Construction: Albania’s building activity grew 36% from 2020 to 2024, nearly ten times the EU average, Eurostat figures show. Growth was driven mainly by housing and slowed to 4.5% in 2024. Business Climate: Tirana’s Chamber of Commerce warned that violence during protests is damaging businesses, jobs and livelihoods, and called for stronger protection of public and private property. Infrastructure: The government approved an amendment to revive Japan’s €110 million Greater Tirana wastewater project, stalled for years; updated designs pave the way for contractor selection, but works still need to be completed. Services: Lagardère Travel Retail reported 6% Q3 revenue growth in EMEA outside France, with Albania among the contributors. EU Industry Policy: Albania provisionally closed accession negotiations on enterprise and industrial policy, advancing alignment with EU rules.

Business Disruption: Tirana’s Chamber of Commerce condemned attacks on businesses and public property during protests, warning that damage puts jobs, investment and livelihoods at risk. Infrastructure: Albania has moved to reactivate a €110 million Japan-funded wastewater project for greater Tirana. The loan agreement is being amended, but work remains unfinished and contractor selection is still ahead. EU & Industry: Albania provisionally closed negotiations on the EU’s enterprise and industrial policy chapter, another step in its accession process. Economic Pressure: The IMF forecasts 3.5% growth this year, but a Bank of Albania survey found capacity use falling in industry, services and trade; construction was the exception.

Business Conditions: Albania’s economy grew 3.61% in the second quarter, but a Bank of Albania survey found capacity use slipping in industry, services and trade. Tirana home prices have more than doubled since 2018, adding to concerns about business and market pressures. Growth Outlook: The IMF forecasts 3.5% growth in 2026 and inflation of 3.2%, while businesses are seeking tax relief as production costs rise. EU Industrial Policy: Albania provisionally closed its fourth EU accession chapter, covering enterprise and industry. All 33 chapters are open, but Brussels says further reforms are needed. Manufacturing and Retail: Reports of 25,000 manufacturing job losses and 150 garment factory closures underscore sector strain. A proposed consumer bill would require shops to show the lowest price charged in the previous 30 days and give online buyers 14 days to cancel.

Business Conditions: Albania’s economy is growing, but businesses report worsening finances and lower capacity use in industry, trade and services; construction was the exception. The IMF forecasts 3.5% growth and 3.2% inflation in 2026. EU Integration: Albania provisionally closed Chapter 20 on enterprise and industrial policy, bringing its total to four of 33 chapters and aligning business rules more closely with EU standards. Consumer Protection: A bill would require retailers to show the lowest price charged in the previous 30 days before advertising a discount, and disclose full costs for online purchases. Manufacturing: The sector faces a deeper slump, with reports of 25,000 jobs lost and 150 garment factories shut. Albanian businesses are seeking tax relief as production costs rise, while a VAT cut for agro-processing has also been proposed.

EU Industrial Policy: Albania provisionally closed accession Chapter 20 on enterprise and industrial policy in Luxembourg, bringing its total to four completed chapters. The EU says further reforms are needed. Economic Outlook: The IMF forecasts 3.5% growth for Albania this year, with inflation at 3.2%. Manufacturing: The sector is under strain, with reports of 25,000 jobs lost and 150 garment factories shut. Businesses are seeking tax cuts as production costs rise, while a proposed VAT reduction could support agro-processing. Trade and Investment: Albania and Israel signed a broader cooperation deal covering trade, investment, agriculture and technology; the government also plans direct contracts with Israeli companies. Regional Links: Corridor VIII is gaining prominence as a strategic transport and economic connection across the Balkans. Energy: Albania has met its clean-energy target, while a new regional oil coordination group aims to improve supply-risk monitoring.

EU Integration: Albania has completed negotiations on the EU’s business and industrial policy rules, bringing provisionally closed chapters to four. Brussels says further reforms are needed, particularly to support small and medium-sized businesses; Prime Minister Edi Rama aims to finish negotiations by the end of 2027. Consumer Prices: A new government platform lets shoppers compare prices for 238 products across five supermarket chains and 155 stores, with a mobile app planned. Economic Outlook: The IMF forecasts 3.5% growth and 3.2% inflation for Albania this year, while warning that higher energy costs pose a risk. Manufacturing Pressure: The sector has lost 25,000 jobs and 150 garment factories have closed, as businesses seek tax cuts amid rising production costs.

EU Integration: Albania is expected to close Chapter 20 on enterprise and industrial policy, bringing completed negotiating areas to four. The government aims to finish accession talks by the end of 2027. Factory Investment: Eco Buildings says its automated wall-panel production line in Durrës remains on schedule and within budget, with operations targeted for the end of 2026. Trade & Energy: Albania and Israel signed a cooperation deal covering trade, technology, energy, water, agriculture and healthcare. Separately, Albania will join a regional oil coordination group to share supply data and prepare for shortages. Industry Pressures: Reports point to 25,000 manufacturing job losses and 150 garment factory closures, as businesses seek tax relief amid rising production costs.

EU Integration: Albania is set to provisionally close Chapter 20 on enterprise and industrial policy, the fourth area completed since July. Trade and Investment: Albania and Israel signed a cooperation agreement covering trade, technology, energy, water, agriculture and healthcare; a separate deal enabling direct government contracts with Israeli firms is also in preparation. Manufacturing: Eco Buildings says its automated wall-panel production line in Durrës remains on schedule, with operations targeted by year-end. Business Costs: Tirana’s Chamber of Commerce is seeking lower agro-processing VAT, customs-duty relief on manufacturing inputs and faster tax depreciation for machinery, citing rising production costs. Sector Strain: Reports say Albania’s manufacturing downturn has cost 25,000 jobs and led to the closure of 500 garment factories.

Investment: Albania is preparing a deal allowing direct government contracts with Israeli firms in energy, cybersecurity, water, agriculture, healthcare and technology; no specific projects have been announced. EU Integration: Albania’s next accession conference is set to advance Chapter 20 on enterprise and industrial policy, with provisional closure expected. Business Costs: Tirana’s Chamber of Commerce wants agro-processing VAT cut to 5–7%, customs duties removed on manufacturing inputs and faster tax depreciation for machinery to ease costs and encourage investment. Manufacturing: The sector is reported to have lost 25,000 jobs, with 150 garment factories shut. Industrial Pollution: In Elbasan, inspectors found 318 tonnes of toxic dust stored at a chrome factory without safe-disposal contracts; the site was temporarily closed, renewing concern over industrial contamination and oversight.

Floods and Infrastructure: Severe flooding in Albania left one person dead, inundated hundreds of buildings and disrupted transport links. Separately, an €80 million French grant will help upgrade Durrës water, sewerage and wastewater systems. Industrial Pollution: Elbasan’s steelworks district was again hit by toxic smoke; inspectors found 318 tonnes of industrial dust stored without contracts for safe treatment or disposal. Business Costs: Tirana’s Chamber of Commerce is urging tax cuts for agro-processing, manufacturing machinery and raw materials to ease rising costs and support investment. Manufacturing Jobs: The sector is reported to have lost 25,000 jobs, with 150 garment factories shut. EU and Energy: Albania has agreed to close another EU accession chapter covering business and industrial policy. The country has met its clean-energy target, while its next solar auction is set to include storage and a new TAP gas facility is planned by late 2027.

Business Costs: Albanian firms are urging tax relief as production costs rise. The Tirana Chamber of Commerce and Industry wants agro-processing VAT cut to 5–7%, customs duties removed on manufacturing inputs and faster tax depreciation for machinery. Manufacturing Pressure: The sector has lost about 25,000 jobs and nearly 150 garment factories have closed; exports fell from €1.4 billion in 2023 to €960 million last year. Businesses cite high costs, labour shortages and a weak euro, and want support to modernise. EU Integration: The EU has agreed to close another chapter in Albania’s membership talks, covering business and industrial policy; formal closure is expected at talks in Luxembourg. Infrastructure: An €80 million French grant will support a €118 million upgrade to Durrës water, sewage and wastewater systems. Regional Connectivity: Albanian officials are promoting Corridor VIII as a route to cut transport costs, attract investment and strengthen links across the Balkans.