November 8 (SeeNews) - The International Monetary Fund (IMF) said it expects Kosovo's gross domestic product (GDP) to rise by 7-8% in 2021 following a 5.3% decrease in 2020.
Kosovo's economic upswing is driven by recovered mobility, policy actions and the support from the diaspora, the IMF said in a statement on Friday upon concluding Article IV consultations with the country.
Inflation in Kosovo is expected to increase to about 5% by end-2021 due to higher energy and food prices.
The IMF also sees Kosovo's GDP growing up to 4% in 2022.
Economic activity will be supported by continued domestic credit expansion and fiscal policy easing, although new virus mutations continue to be the main downside risk, the IMF noted.
"Though the strength of the ongoing economic recovery suggests that fiscal policy should revert to the fiscal rule beginning in 2022, the budget needs to include an allocation for emergency expenditures should the virus strike back," the Fund said.