Western Balkans Regular Economic Report, No. 14, Fall 2018 : Higher but Fragile Growth
Growth in the Western Balkans has strengthened to an estimated 3.5 percent. In most of the region, growth projections for 2018 have been revised upward. Growth was stimulated by higher public investment and consumption. Driven by tax reforms and fa...
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| Format: | Report |
| Language: | English |
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World Bank, Washington, DC
2019
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| Online Access: | http://documents.worldbank.org/curated/en/111281562752461087/Western-Balkans-Higher-but-Fragile-Growth http://hdl.handle.net/10986/32088 |
| Summary: | Growth in the Western Balkans has
strengthened to an estimated 3.5 percent. In most of the
region, growth projections for 2018 have been revised
upward. Growth was stimulated by higher public investment
and consumption. Driven by tax reforms and faster growth,
higher tax revenues created fiscal space, which some
countries rushed to use for current spending and capital
investment. Higher exports are also necessary for more
secure long-term growth. External imbalances have been high
but mostly stable. The risks clouding a positive growth
outlook are both external and internal. A possible
tightening of the financing conditions in international
capital markets is a downside risk, especially in countries
that have external and fiscal imbalances. With domestic
sovereign bond markets often underdeveloped, Western Balkan
countries are exposed to rises in global interest rates.
Robust growth in the region also depends heavily on domestic
and regional political stability, which define the speed of
structural reforms. Mitigating these external and internal
risks requires both a firm commitment to fiscal
consolidation and acceleration of structural reforms. |
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