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The IMF increases the forecast for Albania, but the economy remains among the slowest in the region
2024-10-22 17:35:07 / EKONOMI&SOCIALE
The International Monetary Fund (IMF), in the October economic perspective report, just published, has increased the forecast for the performance of the Albanian economy for this year. The IMF now expects the country's economy to grow by 3.3% in 2024, from the 3.1% that was expected in the previous April report.
The revision came after INSTAT reported that real GDP growth in the first half of 2024 is estimated at 3.94%, as it revised the gross domestic product calculation methodology. Construction and tourism were the two sectors that gave the main impact on this trend in the first 6 months of the year. For 2025, the IMF's expectation remains unchanged at 3.4%.
Although Albania's economic outlook for 2024 has increased compared to the previous estimate, the country is still among the slowest in the region. Serbia is expected to have the highest growth, with 3.9%, followed by Kosovo with 3.8% and Montenegro with 3.7%. Albania leaves behind Bosnia and Herzegovina and North Macedonia, with 2.5 and 2% respectively. For 2025, the country is expected to have the second lowest growth in the region (3.4%), leaving behind only Bosnia, with 3%. The record is expected to be held again by the Serbian economy, which is expected to accelerate to 4.1%.
The global economy remains resilient
The IMF estimates in the report that the global battle against inflation has been largely won, although pressures on prices continue in some countries. After peaking at 9.4 percent on an annual basis in the third quarter of 2022, headline inflation rates are now forecast to reach 3.5 percent by the end of 2025, below the average level of 3.6 percent that occurred between 2000 and 2019.
Moreover, despite a high and synchronized level of monetary policy tightening around the world, the global economy has remained remarkably resilient throughout the disinflationary process, avoiding a global recession. Global growth is projected to remain steady at 3.2 percent in 2024 and 2025, although some countries, particularly low-income developing countries, have seen significant revisions to slowing growth, often as a result of increased conflict.
Slow growth in the eurozone
In the euro area, growth appears to have bottomed out in 2023. The euro area economy is expected to grow by a modest 0.8 percent in 2024 as a result of better export performance, especially goods. In 2025, growth is forecast to accelerate to 1.2 percent, helped by stronger domestic demand.
Rising real wages are expected to boost consumption and a gradual easing of monetary policy is expected to support investment. Continued weakness in manufacturing weighs on growth for countries such as Germany and Italy. However, while Italy's domestic demand is expected to benefit from the National Recovery and Resilience Plan funded by the European Union, Germany is experiencing problems from fiscal consolidation and a sharp drop in real estate prices./ Monitor
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