As Albania works towards its ambition of joining the European Union by 2030, the country is broadening its economic offer beyond its popular tourist destinations. The economy is expanding at a pace that many larger European markets would envy, with preliminary data showing 3.8% growth in 2025, supported by domestic demand. The goal now is to see whether the country can convert that growth into productivity, stronger wages, institutional credibility and a business environment capable of competing inside the European Single Market.
This is the task ahead of Delina Ibrahimaj, appointed Minister of Economy and Innovation in September 2025. For the minister, Albania must move beyond the headline metrics of expansion and ask what kind of growth it is producing. “In practical terms, this means shifting the focus from growth in volume to growth in value,” says the minister. “We are working to strengthen productivity, increase the share of higher value-added sectors and ensure that economic expansion translates into better jobs, higher wages and stronger competitiveness.”
It is a significant reframing for a country that, over the past decade, has become one of Europe’s most visible emerging tourism destinations. Albania’s coastline, mountains and improving infrastructure have helped attract millions of visitors, giving the economy a powerful source of foreign exchange, employment and international visibility. Yet for policymakers, tourism is only the opening act. The government’s larger ambition is to turn Albania into a platform for investment, digital services, renewable energy, light manufacturing and innovation.
Dr Olta Manjani, Deputy Minister of Economy and Innovation, describes the shift as a change of emphasis – with practical implications. “Albania is no longer looking only to grow faster – we are working to grow smarter,” she says, adding that the focus is now on the quality, sustainability and inclusiveness of that growth. “What that means in practice is building an economy that is innovation-driven, export-oriented, digitally enabled and fully aligned with European standards.”
That alignment with European standards carries unusual weight in Albania’s current economic debate. EU accession is not only a diplomatic objective. It has become the organising principle for regulatory reform, from public administration to environmental policy and labour-market modernisation. Prime Minister Edi Rama has made EU membership by 2030 a central goal of his new mandate, although the timetable remains demanding and dependent on continued reforms, including those linked to governance and electoral standards.
For the Ministry of Economy and Innovation, that accession path creates both pressure and opportunity. On one hand, Albania must show it can meet the expectations of a more sophisticated investor base. On the other, convergence with EU rules gives businesses a clearer framework and foreign investors greater confidence. “The objective is to build an economy that is resilient, diversified and fully prepared to compete within the European Single Market,” says Ibrahimaj.
The ministry’s work is therefore less about one flagship reform than about stitching together a new economic architecture. Ibrahimaj points to business climate reform, reduced administrative barriers and the acceleration of digital transformation as early priorities. Manjani adds that the most consequential decisions have been those connected to digitalising public services, investing in infrastructure and creating a more predictable environment for strategic investments. “These are not isolated measures,” says Manjani. “Together they are transforming how the Albanian economy functions and, critically, how international investors perceive Albania.”
Albania’s economic proposition has traditionally been based on low costs, geographic proximity and an underdeveloped market with room to grow. Those advantages remain. But investors from advanced European economies now demand more evidence of regulatory predictability, contract security and institutions that can support long-term capital deployment.
Digital transformation has become one of Albania’s strongest calling cards. More than 95% of public services are now available online through the e-Albania platform, according to the government. “Digitalisation has also reduced administrative burdens and, by minimising face-to-face interactions with public institutions, it has materially reduced the incentives for corruption,” says Manjani.
Among efforts to strengthen public trust, digital government has become part of the investment case. Faster licensing, fewer paper-based procedures and more transparent interfaces can directly affect the cost of doing business. “The next phase is moving from a highly digitalised government to a fully digitalised society,” says Manjani, a step that, according to the deputy minister, would ensure that citizens, companies and the private sector can absorb and benefit from these capabilities.
One of the ministry’s most important regulatory priorities is the shift towards risk-based inspections. In practice, this means compliant businesses face fewer and more targeted controls, reducing unnecessary administrative pressure. Ibrahimaj also points to stronger public procurement transparency and improved digital platforms as part of a wider effort to increase equal treatment and investor confidence. “Our approach to regulatory reform is focused on creating a simpler, more transparent and more predictable environment for businesses,” says the minister.
Foreign direct investment remains central to this agenda. Albania has extended its law on strategic investments to December 2026, maintaining fast-track procedures and incentives across priority sectors. Manjani says the extension is an important signal of continuity. “Our focus is on strengthening institutions, improving legal certainty and predictability and accelerating procedures transparently,” she says.
The Albanian Investment Development Agency serves as a single entry point for investors, while free economic zone and techno-park legislation provide fiscal facilities, including tax exemptions for defined periods. Yet the underlying pitch is increasingly institutional rather than purely fiscal. Albania wants to be seen not just as a cost-competitive destination but as a credible European economy.
“What makes Albania particularly attractive is the combination of EU alignment and cost competitiveness,” says Ibrahimaj. “Investors benefit from a regulatory framework that is converging with European standards, while operating in a market that still offers flexibility, speed and room for growth.”
The launch of the first European Institute of Innovation and Technology community hub in Albania in February 2025, together with five European Digital Innovation hubs, is part of the strategy. The purpose is to give start-ups, SMEs and entrepreneurs practical support ecosystems rather than symbolic infrastructure. Ibrahimaj highlights the launch of Startup Albania, a dedicated event, and commitments under the Berlin Declaration as part of a more structured effort to strengthen innovation hubs.
These efforts are particularly relevant for German investors, as the country is one of Albania’s most important economic and political partners. According to Germany’s Federal Foreign Office, bilateral trade reached €677 million in 2024, while the German Association of Industry and Trade in Albania has 91 members. Germany also has a long history of development cooperation with Albania, which officials say has exceeded €1.65 billion since the late 1980s.
Energy is perhaps the most compelling example of that opportunity. Albanian officials say the country produces 100% of its electricity from renewable sources, with roughly 95% coming from hydropower. That gives Albania a strong green-economy foundation. The country has around 300 sunny days per year, making solar energy an obvious priority. Wind power, energy storage and grid modernisation are also moving higher up the policy agenda.
“Germany brings precisely the expertise and technology in the green transition that Albania needs,” says Manjani. The opportunity extends beyond power generation to energy efficiency, green mobility and sustainable tourism infrastructure. For German companies with experience in engineering, renewables, storage and industrial efficiency, Albania offers a market where European standards are becoming more important, but where the competitive field is still relatively open.
“Germany brings precisely the expertise and technology in the green transition that Albania needs,” says Manjani. The opportunity extends beyond power generation to energy efficiency, green mobility and sustainable tourism infrastructure. For German companies with experience in engineering, renewables, storage and industrial efficiency, Albania offers a market where European standards are becoming more important, but where the competitive field is still relatively open.
As EU rules tighten, Albanian businesses will need to align with environmental and climate standards to preserve market access and remain viable partners in European supply chains. The ministry is therefore working on incentives and financial instruments to help firms, especially SMEs, adapt. “Sustainability is now a core component of economic competitiveness, particularly in the context of EU integration,” says Ibrahimaj.
Tourism remains another major pillar, though the government is careful to frame it as a platform for wider development rather than an end in itself. Albania hosted more than 12 million visitors last year, according to Manjani, against a resident population of about 2.4 million. The challenge now is to manage growth responsibly and avoid the pressures of mass tourism on housing, infrastructure and natural resources.
Infrastructure improvements are central to that vision. Airports, roads, ports and hospitality investments have shortened travel times and opened southern regions to more structured development. Vlorë International Airport, with planned capacity for two million passengers a year, is seen as especially important because of its proximity to Italy and its potential to support both tourism and regional investment connectivity.
“Albania remains an emerging market, which means that there are still opportunities for early positioning and higher returns,” says Ibrahimaj. The opportunity for investors lies in entering early and helping shape a market that is still moving towards higher-quality and more sustainable models. “We cannot rely on scale or natural resources alone,» says Manjani, «we must invest in knowledge and position Albania as a modern, competitive economy within both the regional and broader European market.”
