EU Global Strategy
“Resilient Growth amid Rising Risks" is the title of the World Bank's most recent Economic Report on the countries of South Eastern Europe. This semi-annual publication covers recent trends and key economic developments as well as the near-term outlook in Albania, Bosnia and Herzegovina, Kosovo, FYR Macedonia, Montenegro and Serbia. In presenting the report, the WB representatives Ellen Goldstein (Director for the Western Balkans) and Gallina Vincelette (Lead Economist) highlighted a number of positive trends in the region with higher growth rates of over 3% in several of the countries (with the notable exception of Macedonia, which saw a net reduction) and some labour market reforms resulting in an increase in job creation. Fiscal consolidation in both Serbia and Albania is expected to substantially reduce their fiscal deficits.
At the same time, unemployment remains persistently very high in all of the countries, and particularly affects the younger generation. Foreign direct investment has also seen a decline in the region.
A critical question is whether the positive growth trends noted are sustainable in the long run. Much will depend on the impact of the rising risks, both external (volatility of financial markets, sluggish growth in main export partners, impact of Brexit, etc.) and internal (elections in several countries, political uncertainty, rule of law issues), and on the countries’ commitment to implement much-needed structural reforms. In particular, efforts will be required to improve the business climate and governance, to eliminate disincentives and barriers to formal employment to enable faster job creation, and to enhance the quality and efficiency of public services. Continued weaknesses in fiscal governance would also need to be addressed."