IMF predicts 4% growth for Kosovo - Inflation expected to be 2.25% in 2025
The Executive Board of the International Monetary Fund (IMF) completed the fourth and final review of the Stand-By Arrangements and the Sustainability Award for Kosovo.
According to the IMF, despite uncertainty from trade tensions, economic growth in Kosovo is expected to remain at 4 percent in 2025. The Fund also announces that during 2025, inflation will be 2.25 percent.
"Kosovo has recorded a strong economic performance, with growth of 4.4% in 2024, mainly due to household consumption and private credit. Inflation has fallen to 1.6% from 4.9% in 2022. The external account deficit has widened to 9% of GDP, as increased consumption and investment led to the expansion of imports. Despite uncertainty from trade tensions, growth is expected to remain at 4% in 2025, with inflation stabilizing at 2.25%," the statement said.
It further states that the implemented programs have achieved all performance criteria and objectives for the end of 2024, including structural measures such as the creation of a cash forecasting function in the Ministry of Finance and the development of a risk assessment plan in the banking sector.
According to the Fund, "Kosovo has improved revenue collection and public investment management, increasing fiscal transparency and improving fiscal risk management. Important reforms have also been made in the financial sector, improving governance and strengthening the capitalization and liquidity of banks."
"This positive performance has supported the authorities' agenda for sustainable economic growth and the fulfillment of climate and energy objectives, with a focus on renewable sources and regional cooperation," the announcement said.
In terms of the political sphere, the constitution of the Kosovo Assembly failed for the nineteenth time on Wednesday. This delay in the process could have negative consequences for the country's institutional stability and economic development.
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