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Foreigners have purchased 207 million euros of Albanian public debt, a 39% increase in 2025

2026-05-06 15:08:00, Ekonomi CNA

Foreigners have purchased 207 million euros of Albanian public debt, a 39%

The portfolio of government debt instruments held by foreign investors reached 20 billion lek or about 207 million euros at the end of last year.

According to data from the Bank of Albania, the value of investment by non-resident entities in the country's sovereign debt securities expanded by 39% during 2025.

However, growth was mainly concentrated in the first half of the year, while it slowed down in the second half, probably influenced by the significant decrease in government bond yields.

Foreign investors currently hold about 2% of the Albanian government's domestic debt stock. Although their share remains modest, foreign investors have contributed to increasing demand and lowering yields in the government debt market, especially after 2024.

The average yield on domestic public debt fell in 2025, after three consecutive years of increases. According to data from the Ministry of Finance, the average yield on all debt securities issued in the domestic market fell to 4.23% at the end of 2025, from 4.56% at the end of 2024.

Excluding the bond portfolio financed by the Bank of Albania, the average yield reached 4.35%, down from 4.65% at the end of last year.

The average yield on domestic debt has reached its lowest level in the last four years.

The participation of foreign investors in the Albanian government's Lek debt instruments market began in 2024, with a focus mainly on investment in bonds.

Although the profile of the investors is protected by confidentiality rules, according to market sources, they are mainly institutional investors, who have decided for the first time to include Albanian government bonds in Lek in their portfolios.

The entry of these investors into the government securities market in Lek has also been influenced by the improvement in the sovereign debt rating and the reduction in the country's public debt.

Ministry of Finance data showed that at the end of 2025 public debt fell to 52.9% of GDP, while preliminary data for the first quarter show a further decline to 48.8%.

The rapid decline in public debt in recent years has been influenced to a large extent by the strengthening of the Lek in the foreign exchange rate, but also partly by a tighter fiscal policy, with declining budget deficits./Monitor