Publication: Western Balkans Regular Economic Report No. 28, Fall 2025: Towards Better Jobs
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2025-10-01
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2025-10-09
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Growth in the economies of the six Western Balkan countries (WB6) is expected to slow in 2025, due to the combined effects of a continued weak external environment coupled with heightened domestic pressures in several countries. Serbia faces the steepest slowdown in 2025, while North Macedonia and Montenegro are seeing modest gains. The regional slowdown reflects shifts in the underlying drivers of growth. Weakening consumption is weighing on employment, with regional employment expansion losing momentum through the course of 2025. Fiscal deficits in the WB6 are projected to widen in 2025, as slowing growth weighs on revenues while spending pressures continue to mount. Building on recent gains, inclusive growth should drive further poverty reduction, although persistent pockets of vulnerability require more carefully targeted interventions. As the WB6 transitions toward a more modern economy, job quality, wage alignment, and task content need to catch up.
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“World Bank. 2025. Western Balkans Regular Economic Report No. 28, Fall 2025: Towards Better Jobs. © World Bank. http://hdl.handle.net/10986/43826 License: CC BY-NC 3.0 IGO.”
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Because of the recession, labor market conditions have taken a turn for the worse and welfare improvements have been interrupted, although government response measures cushioned the blow. Policy efforts in the region need to remain focused on fighting the pandemic, limiting the economic damage and facilitating recovery.
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