The IMF lowers the expectation for Albania's economic growth in 2022, it is estimated to be the lowest in the region

The International Monetary Fund (IMF), in light of new developments following Russia's attacks on Ukraine, has significantly reduced Albania's economic growth expectations by more than halving.

In the April report of the "Global Economic Outlook", recently published, the IMF predicts that the Albanian economy will grow this year by only 2%, from 4.5% that was forecast in October. This slowdown comes as in 2021, the domestic economy grew by 8.5%, after falling by 3.5% in 2020, when the economy suffered the consequences of the pandemic. Growth rates are expected to be low in 2023, with 2.8% and will accelerate slightly to 3.4% by 2027.

Our country is estimated to have the lowest growth in the region. For Montenegro the rating is 3.8, for Bosnia and Herzegovina 2.4%, for Kosovo 2.8%. Northern Macedonia is expected to grow by 3.2%. Serbia is less expected to feel the war, which is estimated to expand by 3.5% this year and accelerate to 4% in the coming years.

All international institutions have revised downwards in recent weeks expectations for the country's economic growth, due to the effects that Russia's war on Ukraine is having on the global economy. But the IMF is by far the most pessimistic. The lowering of the IMF forecast is related to the war and its impact on the country's key partners (such as Italy) as well as the energy situation.

According to the European Bank for Reconstruction and Development (EBRD), Albania's economy is expected to expand by 3.3% in 2022, decreasing by 0.4 percentage points, compared to the November projection.

The World Bank in its latest report "War in the Region" for Central Europe and Asia now expects the domestic economy to grow by 3.2 percent, or 0.6 percentage points less than the previous report. Even for 2023, the economy is expected to grow by 3.4%, or 0.3 percentage points less than the previous estimate.

Expectations for global growth are declining

According to the IMF's April Global Economic Outlook, entitled "War Stops Economic Recovery," global economic outlook has deteriorated significantly since the last forecast in January. At the time, the IMF predicted that the global recovery would be strengthened by the second quarter of this year following a short-lived impact of the Omicron variant. Since then, the outlook has deteriorated, largely due to the Russian occupation of Ukraine - sparking a tragic humanitarian crisis in Eastern Europe - and sanctions aimed at putting pressure on Russia to end the conflict.

Përtej ndikimeve të menjëhershme humanitare, lufta do të frenojë rëndë rimëkëmbjen globale, duke ngadalësuar rritjen dhe duke rritur inflacionin edhe më tej. Raporti parashikon që rritja globale të jetë në 3.6 për qind në 2022 dhe 2023, përkatësisht 0.8 dhe 0.2 pikë përqindjeje më e ulët se në parashikimin e janarit. Ulja e vlerësimit reflekton kryesisht ndikimet e drejtpërdrejta të luftës në Rusi dhe Ukrainë dhe efektet globale të saj.

Si Rusia ashtu edhe Ukraina parashikohet të përjetojnë tkurrje të mëdha të PBB-së në vitin 2022. Kolapsi i rëndë në Ukrainë është rezultat i drejtpërdrejtë i pushtimit, shkatërrimit të infrastrukturës dhe eksodit të njerëzve të saj.

Në Rusi, rënia e mprehtë reflekton ndikimin e sanksioneve me ndërprerjen e lidhjeve tregtare, dëmtim të madh të ndërmjetësimit financiar të brendshëm dhe humbjen e besimit.

Ukraine is expected to have an economic decline of -35% and Russia of -8.5%.

The report notes that the economic effects of the war are spreading widely - such as seismic waves emanating from the epicenter of an earthquake - mainly through commodity markets, trade and financial ties. Because Russia is a major supplier of oil, gas and metals, and, along with Ukraine, wheat and corn, the current and expected drop in supply of these goods has already significantly increased their prices.

Europe, the Caucasus and Central Asia, the Middle East and North Africa, and Sub-Saharan Africa are most affected. Rising food and fuel prices will hurt lower-income households globally, including in South America and Asia./Monitor