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IMF expects rise in fiscal deficits, public debt in Western Balkans - report

Author Radomir Ralev
IMF expects rise in fiscal deficits, public debt in Western Balkans - report Sebastian Sosa; Source: University of California

BELGRADE (Serbia), May 15 (SeeNews) - The International Monetary Fund (IMF) expects a significant increase in the fiscal deficit and public debt of countries across the Western Balkans in 2020 due to the coronavirus crisis, Serbian media reported.

"This is the result of lower economic activities and fiscal measures taken to support the economy and employment," Tanjug news agency quoted the IMF resident representative in Serbia, Sebastian Sosa, as saying on Thursday.

Weak demand in sectors that have been hit hard, such as tourism, catering, entertainment and retail, may last longer than expected at present, Sosa added.

"Uncertainties could affect private sector investment and consumption more than currently projected. Also, the growth of the EU's key trading partners could be lower than expected," he added.

In the April 2020 edition of its World Economic Outlook report, the IMF said it expects the economies of all Western Balkans countries to shrink in 2020 as a result of the coronavirus outbreak. According to the forecasts, Montenegro's economy will be most severely hit by the crisis in the region and is expected to shrink by 9% this year. The economic output of Bosnia and Herzegovina, Albania and Kosovo is forecast to drop by 5.0% each, while the gross domestic product of North Macedonia and Serbia is expected to decrease by 4.0% and 3.0%, respectively.