BELGRADE, April 11 (Xinhua) -- Growth of the Serbian economy and the rest of Western Balkans is expected to accelerate, the World Bank estimated in its economic report presented here Wednesday, but warned of the need for structural reforms to reduce fiscal deficits.
The report, presented by World Bank Country Manager for Serbia Steven Ndegwa and economist Lazar Sestovic, is based on the expected recovery of growth in Serbia and Macedonia and increased investments in Bosnia and Herzegovina, as well as the prediction that the growth will slow down in Albania and Montenegro with big investment projects reaching their final stages.
"Regional GDP growth is projected to rise from 2.4 percent in 2017 to 3.2 percent in 2018 and 3.5 percent in 2019," the report said, adding that most of countries are expected to grow faster, pushed up by projected stronger growth in Europe.
According to World Bank's estimations, Albania is expected to have the biggest GDP growth in 2018 at 3.6 percent, followed by Serbia and Bosnia and Herzegovina with 3.0 percent, Montenegro with 2.8 percent and Macedonia with 2.3 percent.
Serbia's estimated growth in the following years is slightly above the regional average -- 3.5 percent in 2019 and 4.0 percent in 2020, while the World Bank also predicts a decrease in the share of country's public debt in the GDP -- from 56 percent this year to 52 percent in 2020.
"GDP growth in the Western Balkans slowed from 3.1 percent in 2016 to an estimated 2.4 percent in 2017," the report noted, and although job growth was slower than in 2016, in the first nine months of 2017, 190,000 new jobs were created in the region, while poverty continued to fall despite rising food and energy prices.
"Serbia and Bosnia and Herzegovina recorded surpluses in 2017, but in the rest of the region, deficits continued, driven by the high amount of recurrent spending, often on poorly-targeted social benefits and subsidies," said the report, suggesting that Western Balkan countries need to reduce external deficits in the medium-term, and to do so, make bold structural reforms.