In positive news for the Western Balkans, the World Bank has revised the 2021 GDP forecast to 5.9% — an announcement made in late October. This news paints a positive picture for the region’s future growth following a 3.1% contraction in 2020 due to the COVID-19 pandemic.
The World Bank also reported that the joint economies of Albania, Bosnia, Kosovo, Montenegro, North Macedonia, and Serbia are projected to grow 4.1% in 2022 and a further 3.8% in 2023.
According to the World Bank, the recovery is supercharged by two inter-related factors — the reopening of domestic markets, powering consumption, and the reopening of the tourism sector. The outlook remains positive for now, but we need to stay cautious as the pandemic is not over.
Although there are some short-term concerns, the labour market was recovering slower than the economy. Job losses from the recession and its aftermath have disproportionately affected women and the young. Youth unemployment rose to 37.7 per cent in 2021, up 5.4 percentage points from June 2020, further worsening youth employment prospects.
According to the World Bank, “All six countries would benefit from reforms in the business environment, governance, and digitalization, which would contribute to the growth and close the gap with EU countries”.
Familiar brown industries characterize the Western Balkans and moving toward a green agenda is far from easy, especially in the short term. Yet, the World Bank believes that a green transition offers significant opportunities for the Western Balkans.
As we see from COP26, the world is taking huge steps toward climate action, causing fundamental societal changes. Put bluntly, consumer and investor preferences are shifting, green technologies and new business models are disrupting more markets, and green policies are reshaping economic landscapes.
Perhaps now is the time for the Balkans to embrace the greening of the economy as it is becoming a significant factor in competitiveness and the ability to attract international finance and investments.