ZCZC
BCN-30
W.BALKAN-ECONOMY-GROWTH-WB
Western Balkans’ economic growth accelerates, but with a risk: WB
BELGRADE, Oct. 5, 2018 (BSS/Xinhua) — The around 3.5-percent growth of
Serbia and other Western Balkan countries takes place at a moment when
numerous political risks and uncertainties turn local and foreign investors
cautious, according to a new annual World Bank report presented here
Thursday.
The Western Balkans Regular Economic Report said that the growth for the
Western Balkan region is estimated to accelerate to 3.5 percent for 2018,
while Albania, Bosnia and Herzegovina, Macedonia, Montenegro and Serbia will
grow at rates between 2.5 percent and 4 percent each.
The report notes that the World Bank’s estimations count on Serbia’s
success in reforming some of the biggest state enterprises and banks by the
end of the year, while it also voices concerns because of recent increase in
external deficit and its implications on foreign debt.
“The risk can be worsened by the possible sharpening of external
conditions in emerging markets, slowing down of growth within the EU and the
prospect of joining, as well as other regional and political developments,”
said Lazar Sestovic, representative of the World Bank in Belgrade.
According to the report, in the medium-term, Serbian economy is expected
to register a growth of about 4 percent, as these projections are largely
dependent on the dynamics of structural reforms and progress on EU accession.
Although in the first half of 2018, Serbia achieved a 4.9 percent growth,
a constant threat of early elections, the recent resignation of the minister
of finance, work on resolving the issue of Kosovo and Metohija, slower-than-
expected opening of the European Union acquis chapters, the lack of formal
engagement with the International Monetary Fund, the deterioration of
indicators relating to governance and the rule of law in the country — “all
of these suggests that growth could have been faster,” says the report.
In addition, the uncertainty generated by regional political events, the
possible tightening of the financial conditions for developing markets in
general, and the concerns about the speed of growth in the EU, make local and
foreign investors more cautious.
This could therefore delay the completion of some important infrastructure
projects, the report reads.
The report also calls for domestic reforms that unleash private investment
and exports, “greater economic integration to promote higher, sustained
growth and stimulate job creation, as well as increased integration between
Western Balkan counties focusing on trade, investment, mobility, and digital
integration” in order to accelerate growth, overcome small and fragmented
national markets, and ensure long-term economic stability.
BSS/XINHUA/HR/1152