The International Monetary Fund (IMF) said on Tuesday it has decreased Albania’s gross domestic product (GDP) growth projection for 2025 to 3.4%, from 3.8% in its previous forecast.

IMF has, however, increased Albania’s 2026 GDP growth forecast by 0.1 percentage points to 3.6%, it said in the October edition of its World Economic Outlook.

Average consumer price inflation in Albania is projected to edge up to 2.3% in 2025 from 2.2% in 2024, the IMF said, lowering its April forecast by 0.1 percentage point. Inflation is seen rising further to 2.8% in 2026.

The IMF also said it expects the economy of Emerging and Developing Europe to expand by 1.8% in 2025, revising down its April forecast by 0.3 percentage points. The region’s output grew by 3.5% last year.

The IMF noted that the global economy is adjusting to a landscape reshaped by new policy measures. Some extremes of higher tariffs were tempered, thanks to subsequent deals and resets. But the overall environment remains volatile, and temporary factors that supported activity in the first half of 2025—such as front-loading—are fading.

As a result, global growth projections in the latest World Economic Outlook (WEO) are revised upward relative to the April 2025 WEO but continue to mark a downward revision relative to the pre-policy-shift forecasts. Global growth is projected to slow from 3.3 percent in 2024 to 3.2 percent in 2025 and 3.1 percent in 2026, with advanced economies growing around 1.5 percent and emerging market and developing economies just above 4%. Inflation is projected to continue to decline globally, though with variation across countries: above target in the United States—with risks tilted to the upside—and subdued elsewhere.

Risks are tilted to the downside. Prolonged uncertainty, more protectionism, and labor supply shocks could reduce growth. Fiscal vulnerabilities, potential financial market corrections, and erosion of institutions could threaten stability.

Policymakers are urged to restore confidence through credible, transparent, and sustainable policies. Trade diplomacy should be paired with macroeconomic adjustment. Fiscal buffers should be rebuilt. Central bank independence should be preserved. Efforts on structural reforms should be redoubled.

The outlook for Europe has improved slightly from July, with the Eurozone now expected to grow by 1.2% this year and by 1.1% in 2026.

But despite the upgrade, Europe's growth trajectory still significantly lags the United States.

Germany's economy is expected to bounce back from recession to register growth of 0.2 percent this year, up 0.1 percentage point, before picking up to 0.9 percent next year.

And France, which is in the midst of a prolonged political crisis, is expected to see growth cool to 0.7 percent this year, before rising slightly to 0.9 percent in 2026.

The one market exception in the Eurozone is Spain, which saw an upgrade and is now expected to see growth remain resilient at 2.9 percent this year and 2.0 percent in 2026. Growth in the United Kingdom is now expected to hit 1.3 percent this year and next.

As the war in Ukraine continues, the Russian economy is likely to see a marked slowdown in growth this year to just 0.6 percent from 4.3 percent in 2024, the IMF said, cutting its outlook by 0.4 percentage points.