The economies of the Western Balkan countries are likely to expand faster than the EU in the next two years, but the outlook remains vulnerable to growing external and domestic risks, including geopolitical and trade disputes, the World Bank said in its latest report, ‘Reform Momentum Needed’.
The World Bank claims the region encompassing Bosnia and Herzegovina, Albania, Kosovo, Northern Macedonia, Montenegro and Serbia will grow by 3.7 percent on the average in 2019 and 2020, in line with the rest of Central and Eastern Europe, and .2 percent more than projected last October.
However, according to the report, the region needs to speed up reforms - because predicted faster economic growth depends on countries’ ability to deal with a number of risks, including slower-than-expected pace of structural reforms and possible tightening of financing conditions in capital markets.
“Countries in the region now have an opportunity to advance reforms to mitigate these risks amid growing public demand for greater economic opportunities”, the bank said.
“In 2018, 96,000 jobs were created in the Western Balkans, mostly in industry and services, down from 171,200 jobs created in 2017. The slower labor market response reflects to some extent the temporary effects of the fiscal stimuli that pushed growth, but did not encourage private sector job creation. Unemployment fell in 2018 but remains high, particularly for women and youth”, the report reads.
The economy of Bosnia and Herzegovina will accelerate this year by 3.4 percent, while the World Bank forecasts 3.9 percent growth in 2020.