The International Monetary Fund has revised down its economic growth forecast for Albania, while projecting Kosovo to record the strongest expansion in the Western Balkans and Serbia to face the largest decline.
According to the IMF’s latest World Economic Outlook, Albania’s economy is expected to grow by 3.4% in 2026, down from a previous estimate of 3.6% made in December. Growth projections for 2027 were also lowered to 3.2%, from 3.4%.
Despite the downgrade, Albania is still forecast to post the second-highest growth rate in the region, behind Kosovo, which is expected to expand by 3.6%. Serbia, meanwhile, recorded the sharpest downward revision, with projected growth reduced to 2.8% from 3.6% estimated last October.
Elsewhere in the region, Bosnia and Herzegovina is expected to grow by 2.2%, Montenegro by 2.8%, and North Macedonia by 3.2%, all reflecting modest downward revisions.
The IMF attributed the weaker outlook to growing global uncertainty, particularly linked to the ongoing conflict in the Middle East, which has disrupted energy markets and weighed on inflation expectations and financial conditions.
Globally, the IMF projects economic growth of 3.1% in 2026 and 3.2% in 2027, below both the 2024–2025 average of around 3.4% and the long-term historical average of 3.7% recorded between 2000 and 2019.
Inflation expectations have also been revised upward. In Albania, inflation is projected to reach 3.7% in 2026, exceeding the 3% target set by the Bank of Albania. Across the region, price increases are expected to be even higher, led by Serbia at 7% and Kosovo at 5.8%.
The IMF warned that risks remain firmly tilted to the downside, citing geopolitical tensions, trade disruptions, high public debt, tighter financial conditions, and potential corrections in financial markets.
While investments in artificial intelligence and structural reforms could support growth, the report underscores that the global economy is entering a more uncertain phase, heavily dependent on developments in the Middle East and the stability of energy markets.
