World Bank predicts economic growth in Albania and Kosovo

2026-04-29 17:28:49, Ekonomi CNA

The World Bank predicts that economic growth in Kosovo this year will be 3.7 percent, or 0.1 percentage point lower than previous forecasts. For 2027, growth is expected to be 3.9 percent.

Meanwhile, economic growth for 2025 in Kosovo, according to the World Bank's estimate, was 3.6 percent.

According to the report, economic growth in the Western Balkans in 2026-2027 is expected to be slow, due to the impact of the knock-on effects of "the conflict in the Middle East, persistent inflation and rising uncertainty."

Following the start of the United States and Israel's war with Iran in late February, global oil prices rose. This increase was reflected in European energy markets and also affected Kosovo, an oil-importing country.

"Global uncertainty and geopolitical tensions are holding back economic growth in the Western Balkans, and rising prices are directly affecting household budgets," said Xiaoqing Yu, World Bank Country Director for the Western Balkans.

“While policymakers are using short-term fiscal measures to cushion the impact of these pressures on households and businesses, our report shows that the key to long-term economic progress is jobs. The Western Balkans has a huge pool of untapped talent – ??women, young people and individuals who want to work but face barriers. Involving them in the labor market is one of the most effective measures the region can take to strengthen the economy,” Yu added.

As for the region, the combined economic growth of Kosovo, Albania, Bosnia and Herzegovina, Montenegro, North Macedonia and Serbia is expected to reach 2.8 percent in 2026, or 0.3 percentage points lower than the previous period. Meanwhile, for 2027, there is expected to be a “modest growth” that, according to the World Bank, will reach 3.2 percent.

"To maintain the pace of reforms in a region facing growing labor shortages, expanding labor market participation is essential, says the latest World Bank report, released today," the World Bank report said.

According to this institution, the region has insufficiently utilized human capital – women, young people and other individuals – who want to work, but face barriers to entering the labor market.

"If the labor force participation rate across the region were the same as that of similar countries in the European Union, this would result in more than 2.8 million additional workers. Just as a result of women's inclusion in the labor market, annual economic growth could increase by 0.35 percentage points," the World Bank said.

According to data from the Kosovo Agency of Statistics, in 2025 the number of employed people exceeded 400 thousand. Meanwhile, among the unemployed there are mostly women, who bear the greatest burden of caring for the family and children.

The World Bank also said that working-age people, including graduates and unskilled workers, are seeking better wages and prospects abroad.

"The paradox lies in the fact that, even though labor shortages are most pronounced in key sectors, many people still remain unemployed or have given up looking for work altogether," the report said.

This international financial institution also warned that the population of the Western Balkans is "aging faster" than anywhere else in Europe, noting that within the next decade, one in five people will be over 65./REL