Check-up of the economy in the second quarter of 2025

The second quarter of 2025 presents a complex picture of the Albanian economy, where contrasts between sectors are clear and essential for understanding economic development trends. While some sectors, particularly services and trade, show high dynamism and stable growth in volumes, employment, and wages, the industrial and energy sectors remain challenged, reflecting a structural weakness that may threaten long-term stability.

This uneven pace of growth indicates that the Albanian economy continues to rely mainly on services and domestic consumption, while the production base and industrial capacity have yet to become a sustainable engine of development.

This economic check-up is not just a statistical overview.
It is an essential tool for citizens, who can understand how changes in economic sectors affect purchasing power, employment opportunities, and real living standards.

For businesses and investors, this overview provides clear information on high-potential sectors and those requiring reforms and strategic investments.

For public policies, this report highlights the need to address structural challenges, diversify the economy, and ensure growth that is more sustainable and resilient to external shocks.

Services are the engine of economic growth

The services sector continues to be the main driver of economic growth in the second quarter of 2025, showing high dynamism and a direct impact on employment and wages.
The net sales volume index recorded significant growth across many key activities.

• Hospitality registered volume growth of +14.5%, employment +8.7%, and wages +25.2%, reflecting the revival of tourism and domestic consumption.
• Real estate posted volume +11.1% and wages +18.4%, indicating an active market and growing demand for housing and property investments.
• Transport, storage, and postal services increased by volume +10.4% and wages +11.3%, signaling the need for strong logistics services to support trade and industry.
• Bars and restaurants recorded volume +9.1% and wages +12.0%, showing a revival in gastronomy services and recreational activities.
• Information and communication recorded volume +8.4% and wages +6.7%, reflecting growing demand for digital services and professional communication.

This dynamism shows a revival of consumption and tourism, creating real opportunities for employment and wage growth at the individual level.
For citizens, this translates into higher purchasing power and direct economic benefits, while for businesses, the increase in demand for services represents a chance for expansion and revision of strategic investment plans.

However, high wage increases, especially in sectors like hospitality and real estate, create potential price pressures, which could impact real purchasing power if not balanced with productivity growth and operational efficiency.
This challenge underscores the importance of policies focusing not only on wage growth but also on modernizing the services sector, strengthening standards, and developing professional capacities to maintain the pace of economic development sustainably.

Retail trade and hydrocarbons are pillars of consumption

While services and trade show clear growth rates, industry and production give worrying signals, highlighting structural weaknesses in the Albanian economy.

• Manufacturing industry recorded a volume decline of -7.5% and employment -3.2%, showing slow productive activity and a lack of flexibility to adapt to market demand.
• Electricity, gas, and steam also recorded volume -5.2% and employment -2.6%, reflecting supply chain issues, efficiency problems, and limited infrastructure investment.
• Construction remains a positive exception with volume +5.2% and wages +16.1%, contributing to overall economic growth.

However, this trend cannot cover the structural gaps in industrial production and energy, which are essential for sustainable and resilient development.

This sectoral tension highlights a clear risk for the long-term sustainability of the economy. Growth relies mainly on services and construction, while the production base remains weak, making the country dependent on imports and generating inflationary pressures with limited innovation and industrial competition.

This situation calls for modernization of industry, strengthening productive capacities, and strategic investments in energy and technology. Otherwise, the economy will continue to be influenced by external factors, losing the opportunity to create a sustainable growth cycle based on local production and innovation.

Industry and energy remain a challenge for sustainability

While services and trade show clear growth rates, industry and production continue to give worrying signals, emphasizing structural weaknesses in the Albanian economy.

• Manufacturing recorded volume decline -7.5% and employment -3.2%, reflecting slow production activity and a lack of flexibility to adapt to market demand.
• Similarly, electricity, gas, and steam recorded volume -5.2% and employment -2.6%, highlighting infrastructure problems and limited efficiency in the sector.
• Construction remains a positive exception, with volume +5.2% and wages +16.1%, contributing to overall growth, but this is not enough to offset gaps in industrial and energy production, which are essential for sustainable development.

This sectoral tension indicates a clear risk for the long-term sustainability of the economy: growth relies mainly on services and construction, while the production base remains weak.

In this context, industrial reform and strategic investments in energy and technology are not just economic priorities but critical needs for the country’s long-term stability and development.

Strategic orientation and European integration

A key dimension that cannot be ignored in the analysis of the Albanian economy for Q2 2025 is the strategic orientation toward European integration. ALTAX’s 2025 publication clearly emphasizes the need for a more innovative, diversified, and sustainable economy to attempt harmonization with European standards and practices.

The strategic orientation of the Albanian economy should already be focusing on a stronger and more competitive foundation for the future.
This orientation includes foreign and domestic investments in innovative and productive sectors, aiming to expand the country’s industrial and technological capacities.
Another key component is the modernization of industry and increased productivity, improving production efficiency and strengthening competitiveness in regional and European markets.

At the same time, the economy urgently needs diversification to reduce dependence on immediate consumption sectors, especially hydrocarbons, which make the country sensitive to global fluctuations and shocks. These steps aim to create a more sustainable economy focused on long-term development.

Current indicators show that the Albanian economy remains partially oriented toward domestic consumption and services, while the productive sectors and energy, essential for full integration and competitiveness in the European market, remain unequal and weak.

For citizens, the message is twofold:

1. Real opportunities for employment and wage growth, especially in services and trade, where growth has been stable and dynamic.
2. The need for smart expenditure management, taking into account potential price pressures and purchasing power, which may be affected by wage increases and dependence on hydrocarbons.

For businesses and investors, this quarter also offers a dual-significance signal.

Services provide immediate opportunities for expansion and profit, but industry requires reforms and innovation, strategic investments, and modernization to ensure competitiveness and long-term stability.

In this context, orientation toward European integration is not only a political objective but a strategic necessity to create a sustainable, citizen-oriented economy where growth relies not only on domestic consumption but also on a strong, innovative production base that meets regional and European market demands.

Q2 2025 check-up shows a dynamic economy, divided into clear pillars.
Services and trade are recording strong and stable growth, while industry and energy continue to present challenges.
The sustainability of the Albanian economy depends on the ability to address structural gaps, modernize industry, and align economic practices with European integration standards.
In this situation, growth can translate into tangible benefits for citizens, real opportunities for businesses, and a more sustainable and balanced economic development.