The Western Balkan are lagging behind other former Communist transitional countries and need to complete the transformation process that began two decades ago, an IMF report says.
Western Balkans countries need to tackle their high budget deficits, cut trade deficits, privatize public institutions and work on labour market reforms, the International Monetary Fund, IMF, says in a new report.
The report presented on Tuesday in Vienna analyses economic growth, fiscal policies and labour market reforms since 2000.
Albania, Bosnia and Herzegovina, Croatia, Kosovo, Macedonia, Montenegro and Serbia have all made major economic achievements in the last 15 years, the report said.
However, they need to complete the transition to market economies in order to lay the ground for future sustainable growth.
The IMF urged Western Balkan nations to narrow the large gaps in their budgets, reduce public debt burdens and tackle bad loans if they are to regain growth and catch up with other former communist states that are now in the EU.
The report, “Western Balkans – 15 years of transition”, said some states have made backward steps compared to other former communist states that have been through the same political and economic transition, adding that 2008 economic downturn has “emphasized their weakness.”
“Six years after the crisis, it is clear that the Western Balkans lag behind other Emerging Europe states in income growth and closing the gap with the Advanced European Union countries,” the IMF report said.
Authorities need to take steps to eliminate legal, judicial, tax and regulatory obstacles, and enlarge the role of the private sector and of the banking systems.
The IMF advises the countries to safeguard their macroeconomic stability and embark on structural reforms.
“Without further reforms, the lackluster growth of recent years could become the norm, imperiling the convergence of living standards toward the levels of advanced EU economies, and denying employment opportunities to many in the region,” David Lipton, the IMF’s first deputy managing director, said in the report.
Source; Turkish Weekly
