BAKU, Azerbaijan, April 26. Growth in the Western Balkans is forecast to moderate in 2025, reflecting broader regional headwinds, before picking up again in 2026, according to the World Bank’s latest projections.
The WB expects GDP growth in the Western Balkans to slow to 3.2 percent in 2025, down from an estimated 3.5 percent in 2024. The figure represents a 0.5 percentage point downgrade from the bank’s January 2025 forecast. Growth is then expected to recover to 3.5 percent in 2026, though this, too, is 0.4 percentage points lower than previously projected.
The revised outlook reflects a combination of factors, including persistent trade policy uncertainty, rising trade barriers, and spillover effects from weak euro area supply chains. Domestic political uncertainty, subdued manufacturing activity in key European partners, and a reduction in fiscal support also weigh on the region’s near-term prospects.
Among the region’s largest economies, Serbia is expected to grow by 3.5 percent in 2025 and 3.9 percent in 2026. Kosovo is projected to expand by 3.8 percent in both years, making it one of the fastest-growing economies in the Western Balkans.
In comparison, average growth in Central Europe is expected to remain more subdued, at around 2.7 percent over the same period.
