Key facts
- The IMF projects the eurozone to grow by an average of 1.2% annually between 2027 and 2031.
- Five European economies are forecast to grow at more than double the eurozone's rate.
- Moldova's projected growth is 3.5% annually, supported by EU integration and reforms.
- Serbia is expected to grow at 3.52% annually, driven by Expo 2027 and investment.
- Ukraine's growth is projected at 3.8% annually, assuming reconstruction post-war.
- Kosovo's growth is expected to reach around 4%, fueled by domestic demand and remittances.
- Malta is forecast to be Europe's fastest-growing economy, with nearly 4% annual growth.
The International Monetary Fund (IMF) projects a period of sluggish economic growth for the eurozone, with an average annual expansion of just 1.2% expected between 2027 and 2031. This outlook is attributed to factors such as high public debt, aging populations, weak productivity, persistent energy costs, and geopolitical uncertainty.
In contrast, several smaller European economies are anticipated to significantly outpace the eurozone's growth. Moldova is forecast to grow by 3.5% annually, benefiting from EU accession talks, substantial EU financing, and strong domestic demand fueled by remittances. Serbia is projected to achieve an average annual growth rate of 3.52%, with momentum building towards 2030-31, largely driven by public investment for Expo 2027 and expanding manufacturing exports.
Ukraine's economic outlook hinges on reconstruction, with the IMF penciling in average annual growth of 3.8%, assuming the war winds down and rebuilding efforts commence. This projection is contingent on an estimated $600 billion in reconstruction needs. Kosovo is expected to maintain robust growth of around 4%, driven by strong household consumption, public investment, and diaspora inflows. Malta is predicted to be Europe's fastest-growing economy, with nearly 4% annual growth, building on its success in tourism, gaming, and financial services, though it faces challenges in moving beyond a labor-intensive growth model.
The IMF's assessments highlight the importance of continued reforms and managing risks, such as the ongoing war in Ukraine and potential slippage in EU-linked reforms, for the growth trajectories of these nations.