SARAJEVO, April 8 (Reuters) - Economic growth for six Western Balkans countries is projected to increase to 3.1% on average in 2026 and 2027 on stronger exports and public investment after a slowdown
World Bank Forecasts 3.1% Growth for Western Balkans by 2026-27 on Export Strength
World Bank Economic Outlook for the Western Balkans
Growth Projections and Key Drivers
SARAJEVO, April 8 (Reuters) - Economic growth for six Western Balkans countries is projected to increase to 3.1% on average in 2026 and 2027 on stronger exports and public investment after a slowdown last year, the World Bank said on Wednesday.
Country-Specific Growth and Investment Initiatives
Albania, Bosnia, Kosovo, Montenegro, North Macedonia and Serbia are forecast to collectively grow by 2.9% this year and 3.2% in 2027, with infrastructure projects funded by the European Union and other public investment expected to offset the likely moderation in consumption growth, the lender said.
Export Sectors and Consumption Trends
While robust services exports, especially tourism and information and communications technology will also fuel growth, consumption growth will cool as wage gains slow and investment weakens due to a fading tourism-led construction boom and softer foreign direct investment (FDI) inflows.
Challenges: Inflation, Energy, and Poverty
The energy price shock due to the war in Iran is expected to fuel inflation, disproportionately affecting poorer households, reducing real wage growth and slowing the pace of poverty reduction, the bank said in a report.
Energy Transition and Policy Recommendations
It added the countries of the Western Balkans, which all aspire to join the EU, could use industrial policies such as a green transition to strengthen their energy security and align their energy sectors with the EU electricity integration package.
Governments of the region, where most countries remain heavily dependent on coal-fired power generation, need to actively engage in the transition, supporting economic diversification in areas where entire local economies are built around extractive and heavy industries, the bank said.
(Reporting by Daria Sito-Sucic; Editing by Toby Chopra)
