bne IntelliNews Southeast Europe Outlook 2024

bne IntelliNews Southeast Europe Outlook 2024
There was a notable deceleration in the growth of economies in Southeastern Europe during 2023, primarily attributed to a weakened external environment and the impact of inflation on household spending and confidence. / bne IntelliNews
By bne IntelliNews January 10, 2024

This Southeast Europe Outlook 2024 has been prepared by bne IntelliNews as part of a series of annual reviews providing updates on the geopolitical, macroeconomic and commercial state of countries in Central, Eastern and Southeastern Europe, and the Caucasus and Central Asia. 

Read the executive summary below. Find the full report via the links at the bottom of the page. 


Following a challenging 2023 marked by energy and inflation crises triggered by the conflict in Ukraine, the economies across Southeast Europe appear poised for a modest rebound in 2024. 

There was a notable deceleration in the growth of economies in Southeastern Europe during 2023, primarily attributed to a weakened external environment and the impact of inflation on household spending and confidence.

There have already been some positive signs in the latter part of the year, with real wages and consumer confidence recovering due to declining inflation. For the EU members in the region, public investment received a boost from the disbursement of EU funds. This is expected to play a crucial role in driving growth in the coming years.

Growth for the region is estimated to have hovered around the 2% mark in 2023, with stronger performances from a couple of the smaller Western Balkan states – notably Kosovo and Montenegro – while Moldova was particularly badly battered by the crises, and Bosnia also suffered from slow growth linked to political instability. 

While there have been bright spots such as the recovery of tourism post-pandemic, the region’s performance going forward will depend to a large extent on the performance of key trading partners in Western Europe, where growth has been sluggish. 

The picture looks better this year, with local governments and international financial institutions (IFIs) projecting a recovery, albeit a gradual one, during the year. As the hikes in energy prices, and to a lesser degree, food prices, tapered off, inflation began to decline, though it remains stubbornly high in some countries. 

This is partly a product of the decline in oil and gas prices to pre-war levels. Amid the hikes in 2022 and 2023, business and consumers have been forced to adapt; gas consumption declined in much of the region, with the fall in gas consumption in Moldova being particularly dramatic. 

The war in Ukraine also sparked a race to diversify sources of gas and reinforce energy security after the shock caused by the invasion of Ukraine and related sanctions. Countries across Southeast Europe are looking to build new gas transportation infrastructure, with most looking south to Azerbaijan as an alternative source to Russia. That inspired the opening of the new Bulgaria-Serbia gas interconnection at the end of 2023, while North Macedonia is also exploring options to improve its connectivity. 

Other countries are investing into liquefied natural gas (LNG) infrastructure. Croatia already has ambitions to become a regional energy hub following the opening of the LNG terminal on the island of Krk, and Montenegro is looking to follow suit. Meanwhile, Romania has its own substantial offshore gas reserves in the Black Sea Neptun Deep perimeter.

There are also investments into renewables as countries embark on the green transition; however, several countries in the region are heavily dependent on coal, notably Kosovo, North Macedonia and Serbia. Bulgaria too is facing protests over transition plans for its coal regions. However, there are positive examples in the region. Albania produces almost all its electricity from hydropower and is now diversifying into other renewables; Romania has slashed its coal use in recent years. 

Politically, 2024 is a super-election year for Romania, with both presidential and parliamentary elections looming towards the end of the year. The ruling coalition comprising the centre-left Social Democratic Party (PSD) and centre-right National Liberal Party (PSD) is expected to gain re-election – one of the main unknowns ahead of the election is how well the radical right Alliance for the Future of Romania (AUR) will perform. A candidate backed by the PSD is the most likely choice of president as incumbent President Klaus Iohannis nears the end of his second term. 

The upcoming elections have, however, caused problems for Romania as the pressing need for fiscal consolidation is pushed down the political agenda in favour of more voter-pleasing policies mainly spearheaded by the senior ruling PSD. 

Croatia will hold a general election in 2024 and political tensions between rival parties have already started escalating. Rivals to the ruling HDZ party led by Prime Minister Andrej Plenkovic have seized on a series of corruption scandals as they seek to unseat the HDZ. In North Macedonia an election is expected in May, where the SDSM will seek to hold on to power in the face of a growing shift by voters towards their nationalist rival, VMRO-DPMNE. 

Serbia ended 2023 with a general election in December that resulted in yet another landslide for the Serbian Progressive Party that has been in power since 2012. Hopes that the snap general election would stabilise the political situation in the country were dashed as it was followed by a wave of protests by opposition groups that claim the vote – especially the local election in the capital Belgrade – was rigged, and strong criticism from Serbia’s Western partners.

EU accession remains the primary foreign policy goal of the Western Balkan states, of which five are currently candidate countries. Progress has been mixed; Montenegro is the current frontrunner and the election of a new government in 2023 may lead to a revitalisation of the reform process after several years of political instability. Serbia’s progress has been impeded by both its unresolved conflict with Kosovo and its refusal to join Western sanctions on Russia. Both Albania and North Macedonia are being held back by bilateral disputes with their EU member neighbours.  

There was better news for Moldova, which at the end of 2023 got the green light to start accession negotiations – barely a year and half after it was accepted as a candidate country in an accelerated process that also saw Ukraine admitted as a candidate. Increased Western support for Moldova after Russia’s invasion of neighbouring Ukraine should help one of Europe’s poorest economies emerge from the dual shocks of the coronacrisis and war. Moldova remains one of the geopolitical battlegrounds in the struggle between Russia and the West, despite President Maia Sandu’s efforts to drag it into the Western camp. 


Request Full Report

Any questions or technical problems contact


Related Articles

Moldova’s largest lender maib puts Bucharest exchange listing on hold

The largest bank in Moldova, Moldova Agroind Bank (main), announced it is postponing its plan to list on the Bucharest Stock Exchange (BVB) because certain provisions in Moldovan legislation make the ... more

Addiko Bank AG receives stable outlook from Fitch Ratings

Fitch Ratings has assigned Austria-based Addiko Bank AG a Long-Term Issuer Default Rating (IDR) of 'BB' and Viability Rating (VR) of 'bb' with a stable outlook. ... ... more

Inflation in the EBRD region has peaked but governments still under pressure

Inflation has peaked in Emerging Europe, Central Asia and North Africa, but rising gas prices in the coming winter will keep pressure on household finances, the European Bank for Reconstruction and ... more