World Bank: Economies of the Western Balkans Are Growing FasterFinance | April 2, 2019, Tuesday // 20:01| views
Reforms are lagging behind, the report said, quoted by NOVA TV.
Economic growth in the Western Balkans has accelerated to 3.8% in 2018, but is vulnerable to "rising external and internal risks," including geopolitical disputes and lagging reforms, the World Bank said.
The average growth rate has grown from 2.6% in 2017 and is expected to be 3.5% this year, faster than that of the European Union, but the bank warned that governments in the Western Balkans need to speed up reforms to protect the progress from external risks. The World Bank referred to the ongoing trade disputes between the US and China, as well as tensions between neighbors Kosovo and Serbia as factors that could endanger the prospects.
Kosovo, which declared independence from Serbia in 2008, imposed a 100% customs duty on Serbian and Bosnian products in November. This move is part of a continuing dispute over Kosovo's independence, which Serbia and Bosnia refuse to recognize.
"If regional trade tensions in the Western Balkans remain elevated - such as Kosovo's tariffs for imports from Serbia and Bosnia and Herzegovina - this will affect the economic outlook," the report said.
Montenegro, Kosovo and Serbia recorded the highest GDP growth rates in 2018 by 4.4%, 4.2% and 4.2% respectively, while Northern Macedonia recorded a 2.7% growth.
Regional growth is mainly due to increased public spending as well as to the increase in net exports from Albania and northern Macedonia, it is written in the report.
However, growth has not been accompanied by an increase in jobs.
"Removing barriers that hinder competition and growth for new businesses will create opportunities for people - promoting entrepreneurship and innovation," said Linda Van Gelder, World Bank Regional Director for the region.