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Coronavirus: EBRD, bleaker outlook for Balkans as well

Recovery in 2021 less strong than forecasted

03 October, 09:25
(ANSA) - BELGRADE, 03 OTT - The European Bank for Reconstruction and Development (EBRD) has revises down its economic forecasts for 2020 for the countries where the Bank operates, including the Balkans, "amid continuing coronavirus uncertainty," the EBRD said, suggesting a milder recovery than expected in 2021.

"Output in the Western Balkans is projected to fall by 5.1 per cent in 2020 due to a collapse in tourism," affecting in particular Albania and Montenegro, and because of "disruptions in global supply chains and lower industrial output, declines in foreign direct investment inflows and remittances," the Bank said in its new Regional Economic Prospect report. GDP growth in the Western Balkans "could recover to 3.4 per cent in 2021," the EBRD is now forecasting, noting that in general "these projections are subject to tremendous uncertainty." According to the new report, in the Western Balkans, Albania and Montenegro will register the strongest drop in growth in 2020 (-9.0%), due to through negative effects on tourism and fall in exports of goods and services. Follow Bosnia-Herzegovina, where a major drop in output was observed in the manufacturing sector, Kosovo and North Macedonia (all -5.0%). Serbia (-3,5%) was particularly hit by a drop in remittances of 30% between January and June 2020. However, in Serbia "the impact of Covid-19 is less severe than in some peer countries, partly because of the high contribution of manufacturing of basic products to the overall output." "In general, the negative impact of the coronavirus crisis more pronounced than expected in Montenegro and North Macedonia this year, where sharp contractions in industry, trade, transport and tourism were observed, EBRD data show.

In 2021 "there will likely be some recovery, with growth of 3.4 per cent forecast, but GDP levels next year are set to stay below those of 2019," the EBRD noted. The strongest economic growth will be observed in Montenegro (5.0%), followed by Albania (4.5%), Kosovo (4.0%) and Bosnia-Herzegovina, North Macedonia and Serbia (3.0%). The EBRD had estimated a much stronger economic recovery in the region in 2021. In the previous Regional Economic Prospects report of May 2020, the Bank forecasted an economic growth of 12.0% in Albania, 10.5% in Montenegro, 7.5% in Kosovo, 6.0% in Bosnia-Herzegovina and Serbia and 5.5% in North Macedonia.

According to the latest forecasts, Slovenia will register a 7.5% drop in GDP in 2020 and a 3.5% growth in 2021, while the GDP in Croatia will drop by 8.5% this year and rebound 3.5% next year.


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