2026 Draft Budget Strengthens Social Welfare with Pension and Wage Increases

Petrit Malaj, the Minister of Finance, presented the draft budget for 2026 during the Conference of Chairpersons meeting. This marked a key step in implementing the government’s program for 2025–2029, which aims to further align Albania with the European Union.
Total expenditures for 2026 are projected to be 886.8 billion ALL, or 31.9% of the gross domestic product (GDP), an increase of approximately 55 billion ALL compared to 2025. Public investments are expected to average 6.5% of GDP from 2026 to 2028. These investments will focus on strategic projects in infrastructure, renewable energy, digital system upgrades, and human capital development, all of which are part of the EU Growth Plan.
The 2026 draft budget is based on four pillars: sustainable economic growth, fiscal consolidation, enhanced social welfare, and accelerated European integration. A key component is pension reform, which is set to take effect on January 1, 2026. In addition to annual indexation, pensions will gradually increase by the following amounts each month:
– Urban pensions: 40,000 ALL
– Partial urban pensions: 22,000 ALL
– Rural pensions: 14,800 ALL
– Family pensions: 18,000 ALL
– Disability pensions: 30,000 ALL According to Minister Malaj, this three-year increase is a social measure and part of a broader economic consolidation plan.
Regarding wages, the draft budget proposes raising the minimum wage to 50,000 ALL beginning January 1, 2026. The goal is to increase it to 60,000 ALL by 2028 and to 70,000 ALL by the end of the term. These increases will ensure workers’ dignity and align with regional standards. “Salary indexation will occur every two years, and supported sectors and other categories will receive higher pay,” Malaj added. He added that the total cost of the minimum wage increase and indexation is estimated at 10 billion ALL and will benefit over 144,000 employees at the central and local levels.
According to the minister, the 2026 draft budget reflects the government’s commitment to maintaining sustainable public finances, fostering long-term economic development, and improving citizens’ welfare.