Economic growth in the Western Balkans is projected to remain subdued in 2026 and 2027, according to the latest World Bank Group Western Balkans Regular Economic Report, as the region continues to face the spillover effects of the Middle East conflict, persistent inflation, and elevated global uncertainty. Combined growth across Albania, Bosnia and Herzegovina, Kosovo, Montenegro, North Macedonia, and Serbia is expected to reach 2.8% in 2026, revised down by 0.3 percentage points from earlier forecasts, before improving slightly to 3.2% in 2027.
The report highlights that while governments are using short-term fiscal measures to cushion the impact of rising prices on households and businesses, long-term economic progress will depend on expanding job opportunities and increasing workforce participation. It points to significant untapped labor potential in the region, particularly among women and young people, who face barriers to employment despite willingness to work. Strengthening inclusion in the labor market is identified as a key step to addressing labor shortages and supporting more resilient, sustainable growth across the Western Balkans.
