Public investments in Albania continue to be realized below the planned level, while legal improvements for their management have not yet been translated into concrete results.
The European Commission, in the Progress Report for Albania 2026, highlights that lack of capacity, insufficient project preparation, cost overruns and procedural shortcomings continue to hinder the implementation of capital investments.
According to the European Commission, although Albania has made progress in strengthening the regulatory framework for public investment management, these changes have not been accompanied by comparable improvements in project implementation.
Problems with the implementation of investments are recurrent and directly affect the performance of public finances. The Commission notes that the budget deficit in 2025 reached 1.8% of Gross Domestic Product (GDP), from 0.7% in 2024, but remained below the planned target of 2.4% of GDP, mainly because capital spending was not implemented as planned.
This means that part of the difference between the planned and actual deficit did not come from programmed savings, but from the failure to realize public investments.
The report highlights that during 2025, changes were approved in public investment management procedures, including provisions related to the Single List of National Projects and requirements for feasibility studies.
Also, in December 2025, the new law on public-private partnerships (PPP) was adopted, which provides that from September 2026, projects of this nature will be included in the Unique List of National Projects and will be subject to standard procedures for the evaluation and management of public investments.
According to the European Commission, these reforms could strengthen project evaluation and fiscal risk oversight, but the bylaws and implementing guidelines have not yet been aligned with the new legislation.
The European Commission has also confirmed a previously raised concern about the unjustified high costs of projects. "Project planning and implementation continue to be hampered by limited administrative capacity, insufficient technical preparation, cost overruns and procedural shortcomings," the Progress Report notes.
The Commission calls for strengthening the evaluation and prioritization of projects, to ensure that public funds are directed towards prepared and feasible investments.
Another concern relates to the way the budget is amended during the year. The Commission notes that the government continues to use normative acts for budget revisions, limiting parliamentary oversight and fiscal transparency. In 2025 alone, the budget was amended four times, while another revision was carried out in 2026. The Commission recommends a return to the usual procedures for budget revision through Parliament.
The Commission also calls for improved management of fiscal risks stemming from state-owned enterprises and PPP contracts, as well as enhanced transparency on the liabilities that these projects may create for the budget. According to the European Commission, improving the management of public investments requires not only legal changes, but also increased capacities for the preparation, selection and implementation of projects, so that planned funds are converted into concrete investments.
