Economic growth: 50 years to catch up to EU

At the current growth rate of 3%, the Western Balkan countries will catch up to the developed EU countries in 60 year’s time, while Serbia would need at least 50 years. In case the growth is 5%, the Balkan countries would need around 20 years to catch up to their EU peers – the World Bank’s experts estimate.

In order for Serbia to achieve faster growth, i.e. increase productivity and employment, as well as the level of investment, it needs to create conditions for the economy to become more competitive, it was said Belgrade at the presentation of the World Bank’s autumn economic report for the region of the Western Balkans.

According to the World Bank’s economist, Lazar Sestovic, the biggest challenges for Serbia next year will be to keep its budget under control, have no substantial and unpredictable expenditures regardless of having concluded a new arrangement with the IMF or not, to increase state investments in public sector and to keep an eye on import in case it starts growing due to increased consumption.

Also, the bank said it expected the Western Balkan region to grow 3.3 percent in 2018 and 3.6 on the back of increase investment and consumption. Before the 2008 global financial crisis, the Balkan states were flooded with cheap capital that fueled average growth of 5-7 percent a year.

The International Monetary Fund and other international organizations have called for structural reforms, including reductions in the public sector, pension reforms and privatizations to tackle a sharp rise in budget deficits and the high unemployment.

All countries, except for Serbia, project budget deficits to be higher in 2017 than in 2016, mainly due to a lack of structural reforms.

The Bank said the six countries need much higher growth rates to catch up with their Western European peers. All six are at different stages of the EU accession process. ”At current growth rates it would take about six decades for average per capita Western Balkan income to converge to the (EU) average.

(Naslovi.net, Reuters, 16.11.2017)

https://naslovi.net/2017-11-16/beta/svetska-banka-srbija-ce-sa-sadasnjim-rastom-za-50-godina-stici-razvijene-zemlje-sa-vecim-za-20/20751774

https://www.reuters.com/article/us-balkans-economy-worldbank/world-bank-revises-down-growth-for-six-western-balkan-states-idUSKBN1DG11J

 

 

 

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