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TIRANA (Albania), July 19 (SeeNews) – The economic upswing continued in the Western Balkans with annual gross domestic product (GDP) growth accelerating to 3.5% in the first quarter of 2018, up from an average growth rate of 2.7% in the preceding quarter, the European Commission said.
“The growth pick-up was driven by Serbia (4.6% from 2.4% in Q1), the largest economy in the region. Investment and private consumption continued to support growth in the region,” the Commission said on Wednesday in its EU Candidate Countries' & Potential Candidates' Economic Quarterly report for the second quarter.
Growth dynamics improved in almost all countries of the Western Balkans in the first quarter of 2018, the report said.
The report noted that in Montenegro and Albania output growth strengthened to 4.5% and 4.4%, respectively. In Montenegro, economic expansion was driven by a surge in investment while in Albania all domestic demand components had a positive contribution to growth.
Kosovo’s annual GDP growth accelerated slightly to 3.5% up from 3.2% in the preceding quarter largely on the back of stronger investment and government consumption, the report noted, adding that in Bosnia and Herzegovina the economy expanded by 2.0% with exports and private consumption driving growth.
“Conversely, in the former Yugoslav Republic of Macedonia output growth slowed to sluggish 0.1% y/y compared to 1.2% in the previous quarter largely due to a sharp decline in gross fixed capital formation,” it noted.
According to the report, economic expansion led to further job creation, and unemployment rates continued to fall in most countries, but they still remain high across the Western Balkans.
The average annual job growth in the Western Balkans was 1.5% in the first quarter, similar to the previous quarter.
The labour market situation in the region remains challenging with unemployment rates ranging from 13.0% in Albania to 26.5 % in Kosovo, the report noted.
“Despite further progress in fiscal consolidation, high public debt levels remain a source of vulnerability in most countries,” the Commission concluded.