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Press | Albanian | Bosnian | Macedonian | Serbian
Economic expansion in the Western Balkans slowed to 2. 6% in 2023 from 3. 4% in 2022, reflecting the effect of weak expansion in the European Union (EU), a key trading partner of the Western Balkans. In addition to Russia’s invasion of Ukraine and the inflationary surge it has unleashed, the slowdown in EU expansion from 3. 6% in 2022 to 0. 6% in 2023 has had a negative effect on trade, investment and business confidence in the Western Balkans.
However, by the end of 2023, real GDP levels in Western Balkan countries were above pre-pandemic levels. Growth definitely surprised Serbia and Montenegro. Si the post-pandemic recovery in 2021 and 2022 showed a duality: maximum manufacturing guidance The economies most affected by the EU slowdown (Serbia, Bosnia and Herzegovina, North Macedonia) are the most affected by the EU slowdown, and the most service-oriented economies (Albania, Montenegro). Kosovo) derive maximum benefit from foreign tourism and demand: this duality was partially reconciled in 2023, thanks to a normalization of economic activity.
The regional labor market continued to perform well in 2023. Unemployment declined in all countries, with the overall rate reaching 10. 9% in 2023. Real wages rose in 2023, reversing the trend of 2022, when inflation outpaced wages.
Poverty in the Western Balkans resumed its downward trend in 2023, albeit at a slower pace than before the pandemic, from more than three points compared to the pre-pandemic year to around 1 point compared to the year between 2022 and 2025.
After reaching levels not seen in decades, inflation rates in the region declined in 2023, driven primarily by the slowdown in the prices of foreign commodities, namely energy and food, which account for a significant percentage of the region’s consumption baskets.
Although the region is expected to return to its pre-pandemic level in 2024, this is not enough to allow for faster convergence with EU revenue source levels in the medium term. The new EU Growth Plan for the Western Balkans, adopted at the end of 2023, provides an opportunity to catalyse growth-enhancing reforms and investments.
The structural reforms aim to boost expansion in the Western Balkans towards a faster and more sustainable improvement in living standards.
In this edition of the Western Balkans Periodic Economic Report, we look at the role of cities as engines of expansion and key players in the green transition.
Cities in the Western Balkans, often small, sparsely populated and with a declining population, are exposed to multiple hazards caused by weeds, excessive heat and poor air quality. This highlight recommends measures on three main fronts to make cities in the region greener. First, make cities more compact, which is smart for growth, budgets, and the environment. Second, expand public transport, make buildings more energy efficient, and manage waste. Thirdly, to take measures to reduce excessive urban heat, in the interests of the fitness and productivity of citizens.
Albania | Bosnia and Herzegovina | Kosovo | Montenegro | North Macedonia | Serbia
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