April 25 (SeeNews) - The World Bank expects the gross domestic product (GDP) of the Western Balkans region to grow by 2.6% in 2023, mostly driven by private consumption and exports, it said on Tuesday.
The region has surpassed pre-pandemic levels despite the effects of Russia's invasion of Ukraine, but it now needs to rebuild buffers to prepare for future shocks and undertake supply-side reforms to ensure more sustainable and greener growth, the World Bank said in a statement after publishing its latest Western Balkans Regular Economic Report.
“To continue weathering the storm presented by multiple economic shocks, countries can achieve high returns by pursuing reforms that boost productivity over the medium term, such as accelerating regional integration, increasing levels of market competition, attracting higher quality investments, and addressing barriers that limit labor force participation, especially among women,” Xiaoqing Yu, World Bank Country Director for the Western Balkans, said.
Inflation in the Western Balkans hit a 20-year high in 2022, driven by a rise in energy and food prices. Although there are signs of it easing, inflationary pressures remain strong and will require further tightening of monetary policy, according to the report.
"In the medium term, the outlook for the Western Balkans remains positive, though reforms are needed to accelerate the green transition and to address key structural challenges," the global lender noted.
The report also suggests that investing in energy efficiency has the potential to provide significant economic benefits for the region, as even modest improvements in energy efficiency could reduce greenhouse gas emissions, boost firms' profits, provide social benefits and help shield against future electricity and gas price shocks.
Real GPD growth estimates and projections for the Western Balkans follow (percentage change):
|
2022 (est.) |
2023 (f'cast) |
2024 (f'cast) |
Albania |
4.8 |
2.8 |
3.3 |
Bosnia and Herzegovina |
4.0 |
2.5 |
3.0 |
Kosovo |
3.5 |
3.7 |
4.4 |
North Macedonia |
2.1 |
2.4 |
2.7 |
Montenegro |
6.1 |
3.4 |
3.1 |
Serbia |
2.3 |
2.3 |
3.0 |
Western Balkans |
3.2 |
2.6 |
3.1 |