Western Balkans Regular Economic Report No. 13, Spring 2018 : Vulnerabilities Slow Growth
GDP growth in the Western Balkans slowed from 3.1 percent in 2016 to an estimated 2.4 percent in 2017. Regional growth in 2017 is less optimistic than the 2.6 percent expected when the Fall issue of this report was published. It slowed in Serbia du...
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| Format: | Report |
| Language: | English |
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World Bank, Washington, DC
2018
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| Online Access: | http://documents.worldbank.org/curated/en/304141523592698571/Vulnerabilities-slow-growth http://hdl.handle.net/10986/29728 |
| Summary: | GDP growth in the Western Balkans slowed
from 3.1 percent in 2016 to an estimated 2.4 percent in
2017. Regional growth in 2017 is less optimistic than the
2.6 percent expected when the Fall issue of this report was
published. It slowed in Serbia due to a harsh winter and
stalled in FYR Macedonia, where the political crisis
deterred both public and private investment. Bosnia and
Herzegovina (BiH) grew at a rate like the last two years.
The dynamism of the smaller economies of Albania, Kosovo,
and Montenegro drove regional growth in 2017, with support
from higher growth in trading partners, a pickup in
commodity prices, and the execution of large investment
projects. Bold structural reforms are necessary if the
region is to grow sustainably over the medium term. Regional
GDP growth is projected to rise from 2.4 percent in 2017 to
3.2 percent in 2018 and 3.5 percent in 2019. Countries are
expected to grow faster, pushed up by projected stronger
growth in Europe, except for Albania, where moderation is
expected as large investment projects are completed, and
Montenegro, which is expected to undergo a much-needed
fiscal consolidation. Among risks to the outlook are trade
protectionism, normalization of interest rates globally, and
low potential growth and uncertainty about domestic policy
or policy reversals. These risks can be mitigated by
rationalizing spending to build fiscal space for
growth-enhancing reforms, and by a more strategic approach
to boost competitiveness. Policies to lift physical and
human capital, expand labor force participation, and improve
market institutions should help raise growth potential and
reduce inequality. |
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