The envoys of the World Bank (World Bank) yesterday presented in Tirana the Regional Economic Report for the countries of the Western Balkans.
According to the report, Albania has had economic growth above 4% in the 2018. Jobs have increased and public debt has fallen. However, reforms need to be implemented quickly to maintain economic stability, mitigate tax risks. Improving the business climate and the application of the law remain priorities, as well as increasing investments in infrastructure and enhancing human capital.
Economic growth in the Western Balkans has reached 3,8% in the 2018 and is expected to be 3,7% on average in the 2019-2020, similar to the average rates of the new EU member states.
However, this forecast is vulnerable to risks.
According to the report, the countries of the region now have the opportunity to carry out reforms by reducing the risks.
The ratio of new jobs appears to be less positive, in fact less compared to a few years ago, which reflects a limited dynamism in the private sector. In 2018, only 96.000 new jobs were created in the Western Balkans, mainly in industry and services, compared to the new 171.200 jobs in the 2017. Unemployment has fallen in the 2018, but still remains high, especially for women and young people. In some countries this decline has led to a reduction in labor force participation and an increase in immigration.
"Politicians in the region must implement reforms to achieve sustainable growth and accelerate the job creation process", he claims Linda Van Gelder, Country Director, World Bank Europe and Central Asia.
"The fast-growing companies create most of the new jobs in the Western Balkans, but there are very few of these companies. Removing barriers that hinder the emergence of new businesses or the growth of existing businesses creates opportunities for people - thus promoting entrepreneurship and innovation, making the most of the potential of human capital in this dynamic region.
The increase in public sector wages and pensions has been an important growth factor in Serbia, Bosnia and Herzegovina, Kosovo. On the other hand, private and public investments have fueled growth. In Albania and Macedonia the increase in exports has certainly played an important role in growth. But foreign direct investment has had other slow pace.
Under these conditions, according to the report, it is vital for the Western Balkan countries to implement reforms to reduce risks and public discontent; review the ways to go to boost productivity, create new jobs; support competition policies; review labor taxes, income tax; increase exports.
In the 2018 Albania has recorded economic growth above 4%, employment growth has increased the workforce and public debt has decreased.
"Despite these improvements, to achieve sustainable growth, structural reforms and progress in EU membership should be accelerated", repeats like colleague Maryam Salim, Country Manager for Albania.
The report also sees the difficulties associated with human capital in the region. If they remain unresolved, these difficulties will limit the prospects for economic growth and poverty reduction.
For example, poor investment in early childhood development leads to poor results in primary and secondary education in some countries, where educational systems often do not offer students the skills that employers need most.
General social assistance programs often do not reach poor and vulnerable families, while health systems are unable to respond to the growth of non-communicable diseases. Individual private health costs remain high.
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