Who is the best economic performer in recent years in Western Balkans?

In recent years, Serbia has emerged as one of the strongest economic performers in the Western Balkans. It is the leader in terms of projected growth, with the economy expected to expand by around 3.5% in 2025. This growth is supported by Serbia’s diverse industrial base, strong infrastructure investment and significant foreign direct investment (FDI).

However, other countries such as Albania and Kosovo are also showing promising performance. Albania, for example, has experienced solid growth due to its tourism sector and infrastructure improvements. Overall, while Serbia stands out in economic performance, the region’s growth trajectory is generally positive, albeit uneven across countries.

The leading economies in the Western Balkans are generally considered to be Serbia, Albania and North Macedonia, based on their growth rates, industrial diversification and foreign investment.

1. Serbia stands out as the largest economy in the region, having made significant strides in implementing its fiscal targets in recent years, particularly in terms of economic sustainability and efficiency. It has shown sustained economic growth, driven by strong industrial performance, significant foreign direct investment (FDI) and infrastructure projects. The country’s GDP growth is projected to continue at around 3.5% in 2025.

2. Albania’s economy has performed strongly, particularly in the tourism and energy sectors. The country’s GDP growth has been driven by infrastructure investment, a growing services sector and a growing number of foreign investments. This positive trajectory is expected to continue in the coming years.

3. North Macedonia is also emerging as an important player in the region, with strong growth in manufacturing, export-oriented industries and services. Its efforts to improve infrastructure and attract investment are essential for its economic expansion.

Montenegro has been the standout economic performer in the Western Balkans recently, achieving the highest GDP growth in the region in 2023, with a growth rate of 6.4% compared to the previous year. This impressive growth highlights Montenegro’s strong economic performance amidst the challenges facing the region. Montenegro has also worked towards improving governance and the business environment through budgetary reforms, such as the establishment of the Secretariat for the Competitiveness Council, which directly contributed to improving processes such as business registration.
Kosovo’s economic performance has been quite promising. In 2024, Kosovo’s GDP growth is expected to accelerate to 3.7%, supported by continued stabilization of international prices and increased investment. The country has shown resilience despite external challenges, with strong consumption and a strong fiscal performance2.
Bosnia and Herzegovina, on the other hand, has faced several economic challenges. The country’s GDP growth rate is projected to be around 1.0% in 2024, assuming a weakening but not complete disappearance of existing inflationary shocks. Despite these challenges, Bosnia and Herzegovina is making gradual progress in various policy areas to strengthen its economic competitiveness4.

Thus, while Serbia, Albania and North Macedonia lead the region in economic performance, the region as a whole is growing, with each country working to improve its competitiveness and integration with the European Union.

However, when assessing the overall effectiveness and long-term sustainability of budgetary policies, Kosovo’s focus on economic recovery and digitalization is notable, while countries such as Montenegro have demonstrated progress in business and governance reforms. Both countries still face challenges related to per capita income and broader economic convergence with EU standards.