Whereas economic growth accelerated in some Western Balkan countries in the third quarter of 2017, it remained unchanged or decelerated in others, writes the European Commission’s EU Candidate Countries’ & Potential Candidates’ Economic Quarterly.
The report, which covers the last quarter of 2017, analyses the economic changes within a specific timeframe in all the EU candidate countries and potential candidates.
“Overall, in the third quarter of 2017, the Western Balkan region’s real GDP growth reached 2.5%, up from 2.1% in the preceding quarter, and compared to 2.8% in the same quarter of the previous year”.
In Serbia, real GDP growth in the third quarter accelerated to 2.1%, compared to 1.4% from the previous quarter, due to stronger investments in a number of sectors. In addition, an increase of exports of goods and services as well as of imports was noted.
A “very modest” growth of 0.2% was noted in Macedonia, mostly driven by a decline in investments due to a recent political turmoil. On the other hand, household spending (+2.9%) and exports (+5.5%) contributed positively to the overall performance.
In Bosnia and Herzegovina and Kosovo, the pace of growth remained unchanged at 2.9% and 4.4%, respectively, in comparison to the previous quarter. The reason for such a development in Kosovo is an increase of exports due to a recovery in mineral and base metal exports and strong investments, whereas in Bosnia and Herzegovina the pace of growth was mainly driven by private consumption and exports, according to the report.
On the other hand, economic growth in Albania went down from 4.1%, in the second quarter, to 3.5%, in the third quarter, as a result of subsidization of investment activity and goods export.
Nevertheless, the projected real GDP growth in 2018 is 4.2% and, according to the IMF Executive Directors, “the growing economy and the new government’s clear electoral mandate provide a good opportunity to continue reform efforts to increase Albania’s growth potential, enhance the resilience and competitiveness of the economy, and strengthen the financial system while maintaining fiscal discipline”.
Finally, the report refers to a strong overall performance of the economy in Montenegro, driven by private consumption and investments.
“In the first three quarters of 2017, annual GDP growth accelerated to 4.3%, compared to 2.6% in the same period a year earlier”, writes the report.
Another important indicator is the labour market situation in the countries of the Western Balkans, where “the jobless rate still remains high”.
According to the report, the economic recovery led to further job creation, although “at a slowing pace and with marginal or no quarter-on-quarter improvement in the unemployment rate in most countries”.
“Growing employment levels contributed to marginally lower unemployment rates in most countries whereas in Serbia the jobless rate increased to 12.9% from 11.8% in the preceding quarter due to an increase in the participation rate and lower informal employment in agriculture”, writes the report.
However, if compared to the year before, the unemployment rates decreased in some candidate states and potential candidates, whereas it increased in others. When it comes to potential candidates, whereas the unemployment rate in Kosovo increased to 30.4% up from 27.1% noted in 2017, in Bosnia and Herzegovina it dropped from 41% in October 2016 to still worrying 38.8%.
The unemployment rates in all candidate countries went down in comparison to 2016. In Albania, the unemployment rate declined to 14%, in Macedonia to 22.1%, in Montenegro to 15.1%, and in Serbia to aforementioned 12.9%.
Publication of this article has been supported by the Balkan Trust for Democracy of the German Marshall Fund of the United States