IMF report reveals Europe's 5 fastest-growing countries

The International Monetary Fund (IMF), in its published World Economic Outlook report, stated that the Eurozone will grow by an average of only 1.2 percent per year between 2027 and 2031. While this rate is expected to reach a maximum of 1.4 percent in 2028, the average annual growth for the broader European Union cannot exceed 1.4 percent. These rates remain well behind the 3.2 percent growth expected in the global economy.

High public debt, persistently high energy prices, weak productivity performance, and geopolitical risks are cited as the primary obstacles facing major economies in Europe. Despite this, the growth potential of some smaller-scale European countries is noteworthy. In the IMF's projections, these countries, stretching from the Mediterranean to Eastern Europe, will far exceed the Eurozone's growth rate over the next five years.

HIGHLIGHTS IN THESE COUNTRIES

Moldova ranks fifth in the IMF projections, with its economy expected to grow by an average of 3.5 percent per year in the 2027-2031 period. Growth is estimated to reach 3.7 percent in 2028. EU investments, reforms, and significant amounts of remittances are noted as being effective in a sustainable recovery. While the IMF emphasizes that "a good harvest, strong domestic demand, and EU financing" are at the root of the recovery, it reports that the Moldovan economy remains sensitive to the war in Ukraine and setbacks in integration processes with Europe.

Serbia, in an extraordinary manner, accelerates its growth toward 2031, surpassing Moldova with an average of 3.52 percent per year. The Expo 2027 world fair, which will be held in 2027 and expects millions of visitors, is paving the way for massive infrastructure and construction investments in the country. The IMF states that Serbia has kept inflation under control and established strong public finances, but notes that investments must be supported by productivity for growth to be sustainable.

Ukraine, which ranks third, could achieve 3.8 percent annual growth in a scenario where the war ends. Massive reconstruction investments are foreseen in the country, where 4.2 percent growth is expected, particularly in 2028. While the IMF highlights the extraordinary uncertainty the war places on the country, it notes that in a negative scenario, growth could fall to 1 percent.

In Kosovo, growth is expected to hover near 4 percent due to resilience in domestic demand and a strong diaspora effect. The IMF is of the opinion that the implementation of the EU's "Growth Plan" will provide additional growth. Furthermore, it is pointed out that dependence on remittances from abroad poses a risk in terms of the country's ability to build export capacity.

Malta is at the top of the economic ranking. The IMF, which forecasts an average growth of 4 percent for the island nation over the next five years, points to its success of 7 percent average annual growth over the last decade. While it is stated that tourism, online gaming, and financial services play a key role in the Maltese economy, it is emphasized that the country must struggle with labor shortages and infrastructure pressure issues. The IMF conveys that increases in productivity and public investment are essential for sustainable growth.

DYNAMIC GROWTH IN SMALL ECONOMIES

According to experts, the economies of countries such as Malta, Kosovo, Ukraine, Serbia, and Moldova benefit greatly from migrant income, EU investments, and restructuring processes. In contrast, major European economies need significant improvements in productivity, innovation, and energy costs to emerge from their weak growth cycle.

In Europe's economic roadmap for the near future, it is noteworthy that while large countries struggle to survive against aging and structural problems, smaller and more flexible economies stand out with their growth trends.