This web page presents information about the work of the IMF in the Western Balkans, including the activities of the IMF Regional Representative Office. Additional information can be found on the IMF country pages of the region (Albania, Kosovo, Montenegro, and Republic of North Macedonia), including official IMF reports and Executive Board documents that deal with the Western Balkans as a region and with each of its countries.

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Mission

The Regional Office for the Western Balkans, located in Vienna, Austria, was created to strengthen the IMF’s relationship with AlbaniaKosovoMontenegro, and Republic of North Macedonia. The objective of the office is to maintain a close engagement with the four countries as well as with donors, international institutions, including the World Bank, and the Austrian government, an important trade and development partner of the Western Balkan region.

Its main tasks include:

• Engaging with policymakers and other interlocutors on economic policies; as well as fostering a dialogue on global economic issues; 
• Supporting IMF operations in the Western Balkans, including policy advice, lending arrangements, technical assistance, and recruitment efforts;
• Helping to coordinate communication and outreach activities across the region.

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News

Kosovo: Staff Concluding Statement of the 2020 Article IV Mission

October 8, 2020

An International Monetary Fund (IMF) mission, led by Mr. Gabriel Di Bella, conducted a virtual visit during September 23-October 7 in the context of the 2020 Article IV consultations. Read the concluding statement here


 

Albania: Staff Concluding Statement of the First Post-Program Monitoring Mission

 

September 28, 2020

 

The November 2019 earthquake and the COVID-19 pandemic have taken a big toll on the lives of Albanian people and the economy. Thanks to adept policy management and globally accommodative financial conditions, macroeconomic and financial stability have been maintained . Albania’s capacity to repay the Fund is broadly adequate, but risks have risen in light of the shocks.

 

Learn more


The IMF says we will have an even deeper recession of 5.5% this year

 

September 21, 2020

The recession as a result of the severe consequences of the pandemic on the economy is completely inevitable this year, both globally and in the country, but the latest forecasts of the International Monetary Fund (IMF) instill even greater pessimism. Despite the initially expected drop in gross domestic product (GDP) of 4%, the IMF Regional Resident Representative for the Western Balkans, Stephanie Eble, in her first interview with Kapital revealed that the IMF forecasts that the decline in economic activity will reach 5.5%. 


 

Republic of Kosovo: Financial Sector Stability Review

 

July 07, 2020

 

The FSSR mission team conducted a diagnostic review of CBK governance and of the financial system, undertook a stocktaking of the implementation of recommendations from the 2012 Financial Sector Assessment Program (FSAP) and MCM TA, and proposed a TA Roadmap to support the efforts of the authorities to address key gaps and vulnerabilities. The IMF Statistics Department (STA) supported the mission with an assessment of the compilation of financial soundness indicators (FSIs), monetary and financial statistics, and balance sheet matrices (Annex I).

 


 

Combating the Impact of COVID-19 in Montenegro

 

July 02, 2020

 

Like many tourism-dependent countries, Montenegro has been hit hard from the effects of COVID-19. On June 24, 2020, the Balkan country received an emergency loan worth $83.7 million under the IMF’s Rapid Financing Instrument to help its economy weather the economic disruption caused by the collapse of tourism and to support higher health spending. Read more

 


IMF Staff Concludes a Remote Staff Visit to Albania

 

July 01, 2020

Due to the fallout of the earthquake and the COVID-19 pandemic, Albania’s economy is expected to contract sharply in 2020 and rebound in 2021. But uncertainty is high.

Temporary, targeted, and transparent support for people and firms hurt by the shocks is warranted and needs to be embedded in a credible medium-term fiscal framework.

Once the effects of the shocks subside, it will be critical to resume revenue-based fiscal consolidation and put public debt on a sustained downward path to rebuild room for fiscal policy maneuver.

Read more


Montenegro : Request for Purchase under the Rapid Financing Instrument; Press Release; Staff Report; and Statement by the Executive Director for Montenegro

June 25, 2020

The COVID-19 pandemic will hit Montenegro hard, as tourism is a key industry. Fiscal space has eroded in recent years due to large public capital outlays, and the COVID-19 crisis is creating new budgetary strains as health spending and other expenditures rise, while the economic contraction lowers revenues.

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Research and Papers

Infrastructure in Central, Eastern, and Southeastern Europe : Benchmarking, Macroeconomic Impact, and Policy Issues

September 28, 2020


CESEE countries lag in terms of infrastructure compared to the EU15, and deficient infrastructure is often cited as a constraint to growth and convergence. Investing in infrastructure is therefore an important long-standing policy issue for the region. In the context of the Covid-19 pandemic, infrastructure investment has also gained some ground as economies look to support activity in the recovery phase once the virus has been contained. 
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Improving Fiscal Transparency to Raise Government Efficiency and Reduce Corruption Vulnerabilities in Central, Eastern, and Southeastern Europe 

May 11, 2020

This departmental paper investigates how countries in Central, Eastern, and Southeastern Europe (CESEE) can improve fiscal transparency, thereby raising government efficiency and reducing corruption vulnerabilities.


North Macedonia—Income Convergence and EU integration 

January 27, 2020

Although growth has been solid in the past two decades, it has not been enough to substantially narrow North Macedonia’s income gap with the European Union (EU). Based on the experience of other countries, joining the EU, which North Macedonia is aspiring to, has the potential to strengthen growth prospects. Read more


Lifting Growth in the Western Balkans : The Role of Global Value Chains and Services Exports

November 18, 2019

This paper focuses on how the countries in the Western Balkans could lift exports through stronger integration with global value chains (GVCs) and broadening of services exports. The experience of countries that joined the European Union in or after 2004 shows that participation in GVCs can help small economies accelerate export and income growth. Read more


Demographic Headwinds in Central and Eastern Europe

July 15, 2019

populations of Central and Eastern European (CESEE) countries—with the exception of Turkey—are expected to decrease significantly over the next 30 years, driven by low or negative net birth rates and outward migration. These changes will have significant implications for growth, living standards and fiscal sustainability. Read more


Reassessing the Role of State-Owned Enterprises in Central, Eastern and Southeastern Europe

June 18, 2019 

The Central, Eastern, and South Eastern European (CESEE) region is ripe for a reassessment of the role of the state in economic activity. The rapid income convergence with Western Europe of the early 2000s was not always equally shared across society, and it has now slowed dramatically in many countries of the region. Read more


Public Infrastructure in the Western Balkans : Opportunities and Challenges

April 17, 2018                                    

An assessment of public infrastructure development in the Western Balkans. The paper quantifies the large gaps across various sectors/dimensions, evaluates current infrastructure plans, and discusses funding options available to countries in the region. Read more


Western Balkans: Increasing Women's Role in the Economy

September 1, 2017

The Western Balkan countries have some of the lowest female labor force participation and employment rates across Europe. Almost two-thirds of working age women in the region are either inactive or unemployed: a huge bite into human capital for a region that endures high emigration and faces declining working age population. Read more


Emigration and Its Economic Impact on Eastern Europe

July 2016

This paper examines the effects of emigration on private sector activity, competitiveness, public finances, and ultimately, growth in Central, Eastern, and Southeastern Europe (CESEE) economies as well as the pace of their income convergence to Western Europe. Read more


Cross-Country Report on Minimum Wages : Selected Issues

June 15, 2016

This paper provides a cross-country report on minimum wages. In the past few years, many countries in Central Eastern and Southeastern Europe (CESEE) have increasingly turned to minimum wage policies. Read more

 

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IMF and the Western Balkans

Albania

Albania: Staff Concluding Statement of the 2019 Article IV Mission
November 26, 2019

Albania : Technical Assistance Report–Monetary and Financial Statistics and Financial Accounts Mission
October 3, 2019

IMF Executive Board Concludes 2019 Second Post-Program Monitoring for Albania
July 3, 2019

Albania : Second Post-Program Monitoring Discussions-Press Release; and Staff Report
July 3, 2019

IMF to Open New Regional Office for Western Balkans
June 14, 2019

Albania: Staff Concluding Statement of the Second Post-Program Monitoring Mission
May 6, 2019

Albania : Technical Assistance Report-Revenue Administration: Supporting the Delivery of the Reform Agenda
April 2, 2019

IMF Executive Board Concludes 2018 Article IV Consultation with Albania
January 28, 2019

Albania : 2018 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Albania
January 28, 2019

Albania: Staff Concluding Statement of the 2018 Article IV Mission
November 20, 2018

 

Kosovo

The Road to Greater Prosperity
November 19, 2019

IMF Staff Concludes Visit to Kosovo
June 19, 2019

IMF to Open New Regional Office for Western Balkans
June 14, 2019

IMF Executive Board Concludes 2018 Article IV Consultation with Kosovo
December 18, 2018

Republic of Kosovo : 2018 Article IV Consultation-Press Release; and Staff Report
December 18, 2018

Kosovo: Staff Concluding Statement of the 2018 Article IV Mission
October 30, 2018

IMF Staff Concludes Visit to Kosovo
June 6, 2018

Statement by IMF Deputy Managing Director Tao Zhang at the Conclusion of his Visit to Kosovo
February 15, 2018

Republic of Kosovo : Selected Issues
February 5, 2018

Republic of Kosovo : 2017 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for the Republic of Kosovo
February 4, 2018

Montenegro

IMF Executive Board Concludes 2019 Article IV Consultation with Montenegro
September 10, 2019

Montenegro : 2019 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Montenegro
September 10, 2019

Montenegro : Technical Assistance Report-Report on the Monetary and Financial Statistics Mission
July 30, 2019

Montenegro: Staff Concluding Statement of the 2019 Article IV Mission
June 28, 2019

Montenegro: Technical Assistance Report-Financial Soundness Indicators Mission (November 29 - December 5, 2017)
March 14, 2019

Montenegro: Technical Assistance Report-Report on External Sector Statistics Mission
December 3, 2018

Montenegro: IMF Executive Board Concludes 2018 Article IV Consultation
May 21, 2018

Montenegro: Selected Issues
May 21, 2018

Montenegro: 2018 Article IV Consultation-Press Release and Staff Report
May 21, 2018

Montenegro: Staff Concluding Statement of the 2018 Article IV Mission
March 7, 2018

North Macedonia

Republic of North Macedonia: Staff Concluding Statement of the 2019 Article IV Mission
November 18, 2019

IMF to Open New Regional Office for Western Balkans
June 14, 2019

Former Yugoslav Republic of Macedonia Adheres to the International Monetary Fund's Special Data Dissemination Standard Plus
January 29, 2019

IMF Executive Board Concludes 2018 Article IV Consultation with FYR Macedonia
January 29, 2019

Former Yugoslav Republic of Macedonia : 2018 Article IV Consultation; Press Release; Staff Report; and Statement by the Executive Director for Former Yugoslav Republic of Macedonia
January 29, 2019

The Former Yugoslav Republic of Macedonia: Staff Concluding Statement of the 2018 Article IV Mission
November 19, 2018

IMF Publishes Fiscal Transparency Evaluation for Macedonia
October 29, 2018

Former Yugoslav Republic of Macedonia : Fiscal Transparency Evaluation
October 29, 2018

Spotlight on the Former Yugoslav Republic of Macedonia: Five Ways to Reform
November 22, 2017

IMF Executive Board Concludes Article IV Consultation with Former Yugoslav Republic of Macedonia
November 22, 2017

 

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Conferences and Events

Navigating the Future in Central, Eastern and Southeastern Europe

Navigating the Future in Central, Eastern and Southeastern Europe

July 14-15, 2019 

The IMF and the Croatian National Bank (CNB) joined efforts again to organize a new edition of the joint conference that took place in Dubrovnik two years ago. This year's conference focused on labor market and demographic challenges, the future of labor, and policies needed to sustain growth and promote convergence. The conference, held in Dubrovnik from July 14-15, was an opportunity to engage with key regional participants on these important topics. Learn more

 

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Regional Economic Outlook

Regional Economic Outlook - Small Cover Europe

Europe

November 2019

Global trade and manufacturing have weakened and so have these sectors in Europe. The evolution of European growth depends on two forces. On the one hand, European exports are softening and prospects for a recovery in global trade are not as strong as they were six months ago. On the other hand, easier financial conditions, expansionary fiscal policy in many countries, and still-strong labor markets are supporting domestic demand. This support is stronger in the newer EU Member States. On balance, near-term growth in Europe is projected to slow from 2.3 percent in 2018 to 1.4 percent in 2019—the lowest growth rate since 2013—and rebound to 1.8 percent in 2020. Amid high uncertainty, risks to the outlook remain to the downside, with a no-deal Brexit the key risk in the near term. Monetary policy should remain accommodative where inflationary pressures are still subdued, which is the case in most European economies. The potential side effects from such policy on financial stability should be carefully monitored. Fiscal policy should continue to be guided by medium-term objectives. But plans for stimulus in case of a sharper downturn should be at the ready, not least because the scope for effective monetary action has diminished. Countries with ample fiscal space should implement fiscal measures that boost potential growth. Reinvigorating structural reforms remains vital to raise subdued potential output growth and address long-term challenges, such as demographics.

Wages have been rising faster than productivity in many European countries, yet signs of underlying consumer price pressures remain limited. To shed light on this puzzle, Chapter 2 examines the link between wage growth and inflation in Europe and the factors that influence the strength of the passthrough from labor costs to consumer prices. The chapter finds that, historically, wage growth leads to higher inflation, but the impact has weakened since 2009. The passthrough is significantly lower in periods of subdued inflation expectations, greater competitive pressures, and robust corporate profitability. These findings suggest that the recent pickup in wage growth is likely to have a more muted impact on inflation than in the past.

Read the report