Foreign Trade, Exports and the Albanian economy, 2026

Foreign trade data for the period 2022–2025 do not show an economy in crisis, but rather an economy confronting the limits of its development model. This is a very important distinction.
According to our in depth study, the year 2022 was perceived as a success because exports reached a historic high. But this peak did not come from increased productivity or the expansion of Albanian industry. It came from very high energy prices and temporary demand from European markets. In other words, it was growth driven by external circumstances, not by the internal strength of the economy. When those circumstances normalized, exports began to fall.
This decline is not episodic. It is repeating year after year, which is why it must be read as a structural signal. Albania has built its economy on low-cost labor, sectors such as textiles, footwear and subcontracting (fason), and on a few main markets, especially Italy. This model worked for a time, but today it is no longer competitive in a European market that demands quality, technology, and added value.
The trade deficit clearly reflects this reality. It has increased from about 434 billion lek to over 540 billion lek. This does not mean the economy is collapsing, but it does mean it consumes more than it produces. Imports of food, machinery, and energy are far higher than export capacity, creating a persistent external dependency.
Tourism and remittances are covering this gap. They bring in foreign currency, strengthen the lek, and maintain macroeconomic stability. But they do not create industry, do not raise productivity, and do not build export capacity. They provide short-term stability, not long-term development.
When we look at individual sectors, the picture becomes even clearer. Textiles and footwear are losing their cost advantage. Minerals and energy depend on weather and international prices. Construction materials and metals are losing their traditional markets. These are the pillars on which exports were built, and they are weakening.
At the same time, sectors such as machinery, spare parts, and some agri-food products have potential. But today they are too small to change the overall picture. The potential exists, but it has not yet become a development engine.
The core problem is value added. Albania exports a lot of labor and raw materials, but little technology, little processing, and few high-value products. This means that even when we export, we earn very little.
The exchange rate also plays a role. A strong lek makes exports more expensive and imports cheaper, damaging domestic production and deepening the trade deficit.
So even though GDP is growing, inflation is low, and public debt is under control, foreign trade tells us the truth: the Albanian economy is not competitive enough.
If this model does not change, we risk having less industry, fewer productive jobs, and greater dependence on construction, tourism, and money coming from abroad.
The solution is not panic. The solution is transformation: export diversification, active industrial policy, investment in technology, processing, and integration into European value chains.

In this way, Albania can move from a low-cost economy to a high-value economy.