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World Bank lowers Western Balkans 2019 GDP growth forecast

World Bank lowers Western Balkans 2019 GDP growth forecast Source:

TIRANA (Albania), October 8 (SeeNews) – The World Bank said on Tuesday it has lowered its forecast for the Western Balkans’ economic growth in 2019 to 3.2% from 3.5% predicted in April.

“Economic activity is slowing in the Western Balkans, as investments and exports continue to fade in the six countries around the region,” the World Bank said in a press release, following the presentation of its latest semiannual Western Balkans regular economic report, fall 2019. 

Economic growth in the Western Balkans accelerated to 3.9% in 2018 from 2.6% in 2017. The World Bank noted that while the regional economy is forecast to grow in 2020 and 2021, it will remain slightly below the ten-year high of 2018.

“While growth in North Macedonia has continued to pick up following a major slowdown in 2019, and is expected to remain strong in Kosovo at 4%, most economies in the region are seeing slower growth compared to one year ago,” the bank said.

Despite the economic slowdown, unemployment continued to decline in the region, falling to historic levels of 15.8% by June of this year, the lender said, adding that the lowest unemployment rate in the region is still Serbia’s, which stood at 10.3% in the second quarter of 2019, followed by Albania's 11.5%.

Even with these positive economic developments, just 44% of working-age people in the Western Balkans has a job, inactivity is still at 48% and widening intraregional disparities in labour market outcomes are of concern, the bank noted. Inactivity has increased in both Kosovo and Bosnia in 2019, it added.

“Continuing growth in the region is helping to create jobs for people, bringing more women into the workforce and helping to curb emigration,” World Bank director for the Western Balkans, Linda Van Gelder, said.

In the face of rising uncertainties in the region it needs to rapidly improve public spending and competitiveness, the World Bank said. It added that tighter controls on wage bills, reductions in tax expenditures, and better targeting of social benefits can lead to more public investment and create fiscal buffers to mitigate rising risks in the region.

Real GPD growth in the Western Balkans (percentage change) follow:

  2018 2019e 2020f 2021f
Albania 4.1 2.9 3.4 3.6
Bosnia and Herzegovina 3.6 3.1 3.4 3.9
Kosovo 3.8 4.0 4.2 4.1
North Macedonia 2.7 3.1 3.2 3.3
Montenegro 4.9 3.0 2.8 2.7
Serbia 4.2 3.3 3.9 4.0
Western Balkans 3.9 3.2 3.6 3.8

Source: Central banks and national statistics offices; World Bank estimates and projections