The IMF lowers the forecast for Albania's economic growth in 2024

2024-04-18 08:04:00, Ekonomi CNA

Albania's tourism boom this year does not seem to have "convinced" the International Monetary Fund (IMF) to be optimistic about the Albanian economy.

In the last report of the global economic overview, published in April, the IMF has revised down the country's economic performance for this year. The Fund expects the Albanian economy to grow by 3.1% in 2024, from the 3.3% that had been the initial estimate in the October 2023 report.

Albania is thus ranked among the countries that will have the lowest growth, the fourth out of six countries in total.

Kosovo is expected to have the highest growth, with 3.8%. Even for Kosovo, the IMF has made a slight downward revision, from the 4% that was the estimate in October. Montenegro is expected to have a growth of 3.7%, the same as in October.

The most sensitive upward revision is for Serbia, which is now expected to expand by 3.5%, from the 3% that was the initial estimate.

For North Macedonia, an increase of 2.7% (0.2 percentage points more) is expected, and for Bosnia-Herzegovina, the strongest downward revision has been made, from 3% to 2.4%.

The IMF expects inflation to decrease to 3.5%, after an average of 4.8% in 2023, to decrease after 2025 to 3%, which is also the objective of the Bank of Albania. The current account deficit (which measures transactions of goods and services with other countries) is expected to worsen slightly to -3.8% of gross domestic product (GDP), from 3.7% in 2023.

The IMF lowers the forecast for Albania's economic growth in 2024

For the year 2023, the country's economic growth marked an annual increase of 3.44%, according to INSTAT's preliminary estimates. Compared to 2022, when the GDP increased by 4.85%, a slowdown was noted,

Construction, real estate and public administration have been the biggest contributors to growth in 2023, while industry and agriculture showed a negative trend.

Although Albania recorded the best tourism year in 2023, with more than 10 million foreign nationals entering the country, consumption was quite weak.

Population consumption grew by just 2.96% in 2023, from 7.37% the previous year, marking the lowest levels since the pandemic.

Even in the second half of the year, when tourism peaks, consumption grew at very slow rates (2.21% in the third quarter and 1.55% in the fourth).

It is estimated that the high level of immigration, especially of young people, and the increase in prices have reduced local consumption, which has not been compensated by foreign tourists, who stay in Albania for a few days and are inclined to spend a little./ Monitor. al