2017年-世界发展银行全球_Western_Balkans_Regular_Economic_Report_No_12_Fall_2017___Job_Creation_Picks_Up_76页_1mb

Summary of the Western Balkans Regular Economic Report No. 12 (Fall 2017)

Core Content

The Western Balkans Regular Economic Report No. 12 (Fall 2017) provides an analysis of economic developments, growth dynamics, employment trends, fiscal sustainability, and the medium-term outlook for the region. It highlights the progress made since the global financial crisis, as well as ongoing challenges that could hinder future growth.

Main Points

1. Economic Growth

• Real GDP growth in the Western Balkans is expected to reach 2.6 percent in 2017, slightly lower than the 3.2 percent projected in the Spring report and the 2.9 percent achieved in 2016.
• Albania, Kosovo, and Montenegro experienced stronger growth in 2017, driven by investment and consumption, while Bosnia and Herzegovina saw stable growth.
• FYR Macedonia and Serbia faced weaker growth, with Macedonia affected by political turmoil and Serbia by a harsh winter that depressed agricultural and construction output.

2. Employment and Poverty Reduction

• About 230,000 jobs were created in the region in the 12 months through June 2017, representing a 3.8 percent increase.
• Employment returned to pre-2008 levels in all Western Balkan countries except Bosnia and Herzegovina.
• Unemployment remains high, ranging from 11.8 percent in Serbia to 30.6 percent in Kosovo.
• Youth unemployment is particularly high, with over 50 percent in Kosovo and 26.4 percent in Albania.
• Low inflation and rising real wages helped reduce poverty in the region, with an estimated 1 percentage point decline in the poverty rate in 2017, lifting about 124,000 people out of poverty.

3. Exports and External Vulnerabilities

• Exports continued to grow, but import-driven consumption and energy imports offset their contribution to growth.
• Albania saw a reduction in its external deficit due to services exports.
• Serbia experienced a wider external deficit due to increased imports.
• Montenegro had a high external deficit (18.6 percent of GDP) due to project-related capital imports and public debt.

4. Fiscal Sustainability

• Fiscal deficits are projected to increase in 2017 compared to 2016 in all countries except Serbia.
• Serbia recorded a fiscal surplus of 0.3 percent of GDP due to fiscal consolidation.
• Public debt-to-GDP ratios fell in Serbia, Albania, and Bosnia and Herzegovina, but nonproductive recurrent spending continues to limit growth-enhancing policies.
• Fiscal consolidation efforts in Serbia, Albania, and Bosnia and Herzegovina have reduced public debt.

5. Credit and Nonperforming Loans

• Credit recovery is gradual, supported by household lending.
• Nonperforming loans (NPLs) remain high, with Albania having the highest NPLs at just above 15 percent of total loans.
• NPLs have declined in several countries due to targeted reforms and write-offs.
• Concentration of NPLs in a small number of domestic banks highlights the need for stronger political commitment to reduce them.

6. Medium-Term Outlook

• The medium-term economic outlook is positive, with growth expected to rise to 3.6 percent by 2019.
• Private consumption and investment are likely to drive growth, supported by EU demand and recovery in the Euro Area.
• Faster growth (5-6 percent) could accelerate income convergence with the EU in just two decades, compared to six decades at current rates.
• Structural reforms and EU accession progress are essential to enhance growth prospects.

Key Risks and Opportunities

Risks

• Policy uncertainty and reversals could harm investment and growth.
• Global interest rates are normalizing, which may increase borrowing costs for Western Balkan countries.
• High US dollar-denominated debt in countries like Serbia and Montenegro could lead to additional pressures.

Opportunities

• EU growth and favorable global liquidity provide a tailwind for the region.
• Structural reforms and EU accession are critical for long-term growth.
• Fiscal sustainability and reducing external imbalances are priorities for the region.

Conclusion

The Western Balkans have made progress in economic recovery and employment growth, but persistent challenges in fiscal sustainability, external vulnerabilities, and high unemployment remain. Structural reforms and EU integration are key to future growth, and sustaining reform momentum is essential to improve living standards and create opportunities for all residents.