According to the World Bank’s latest South East Europe Regular Economic Report, the economies of the Balkan states all saw modest increases in growth in 2015, and should continue to grow steadily in the coming two years. According to the report, “economic growth throughout the region is stimulated by recovery in domestic demand and developments in the global economy.”
However, unemployment in the region remains very high, with youth unemployment at about 45% across the Balkans.
Therefore, while macroeconomic stability is necessary for sustained income growth, it is not sufficient; Structural issues such as labor market, competitiveness, public finances, must be tackled so that the SEE6 countries can accelerate growth and restart their EU convergence process which was stalled since the 2008 global financial crisis. Vigorously pursuing structural reforms while keeping the economy stable will provide the needed stimulus to potential growth. The structural reform agenda needs to be multipronged: stimulate employment by eliminating disincentives and barriers to formal jobs, support investment by improving governance and the business environment, and deepen international integration and connectivity. It also requires that public services and social protection systems be made more efficient and more equitable.
