The economic situation in Western Balkans has been deteriorating for last several months, which means that the recovery that began in 2013 was fragile, says a recent economic analysis of the European Commission.
Serbia and Albania have entered into recession. The only significant growth in real gross domestic product (GDP) has been registered in Macedonia, B92 quotes the EC analysis.
Apart from Macedonia, a GDP growth has been also registered in Kosovo as a result of the private consumption, stimulated by large increase this April of public sector wages and pensions. The analysis indicates that "the severe flooding this May in Serbia and Bosnia/Herzegovina had devastating consequences for the infrastructure and caused huge losses in manufacturing, particularly in the mining and energy sector."
Halting of the growth in Montenegro and Albania is a result of the substantial decline in industrial production, while in Serbia the situation worsened due to the lack of investments.
Despite of the slight decline of unemployment rate in recent months, it is still high in the region, reaching 30 percent in Kosovo; 28% - Macedonia; 27.5% - Bosnia/Herzegovina; over 20% - Serbia; and 18% -Albania.
However, the employment rate in the first eight months has been increasing in Albania, as well as in Macedonia as a result of the substantial recovery of the manufacturing sector.
The unemployment rate in the Western Balkans is still high, especially among young people, which requires decisive and credible structural measures on the labor markets and production, the analysis reads.
A major challenge for most Western Balkan countries is the low coverage of imports by exports, worsening the current account deficit situation, especially in the first half of 2014. This deficit waslowest in Macedonia - 1.2% of the GDP, while in other countries of the region it ranges from 7.0% Bosnia/Herzegovina to 11.6 - Albania and 15.2 - Montenegro.
At the same time there has been a general decline of prices mainly in the sector of food, clothing, communications and transportation.
Banks in the region slightly increased loans to companies. The highest rate of non-performing bank loans is registered in Albania - 24% and Serbia - 23%. Balancing the budget expenditure is notified in Albania and Montenegro, partly due to improved tax collection.
In contrast, Serbia and Bosnia/Herzegovina are dealing with deteriorated economic situation and lower budget income as a consequence of flooding, the analysis reads.
- See more at: http://www.independent.mk/articles/11429/EC+Macedonia+-+Bright+Spot+in+Balkan+Region#sthash.KtORwapC.dpuf
