BELGRADE, April 2 (Reuters) - The economies of the Western Balkans are likely to expand faster than the European Union in 2019-20 but the outlook may be vulnerable to threats including popular unrest, the World Bank said on Tuesday.
The global lender said the region encompassing Albania, Bosnia, Kosovo, Macedonia, Montenegro and Serbia would grow by 3.7 percent on the average in 2019 and 2020, in line with the rest of Central and Eastern Europe.
Last October the bank projected regional growth at 3.5 percent in 2019 and 3.8 percent in 2020.
The report said that fiscal stimuli and favourable external conditions propelled regional growth of the six countries in 2018 but political risks may come to dampen medium-term growth.
“There is growing public discontent in several countries which could lead to higher political uncertainty and a slower pace of structural reforms,” the report said.
Governments in Serbia, Albania and Montenegro have been grappling with protesters demanding snap elections, an end to violence against political opponents and media and moves to tackle widespread corruption, nepotism and organised crime.
The economies of Bosnia, Kosovo and North Macedonia will accelerate this year to 3.4 percent, 4.4 percent and 2.9 percent respectively, driven by investments in energy sector, domestic demand and consumer confidence, the report forecast.
Montenegro’s economy is seen slowing by 1.5 percentage points to 2.9 percent, the bank said, while growth in neighbouring Serbia is projected to fall by 0.7 percentage points to 3.5 percent.
The report also said Western Balkan economies also face risks from slower-than projected growth in the EU, wider geopolitical and trade disputes, and a possible tightening of financing conditions in capital markets.
The bank praised fiscal consolidation and reduced public debt in Albania and Serbia, but warned that it is “critical to safeguard these gains” and said that in 2018 debt remained on the rise in Montenegro, North Macedonia and Kosovo. (Reporting by Aleksandar Vasovic Editing by Mark Heinrich)