Job creation loses pace in the Western Balkans

Job creation loses pace in the Western Balkans
Employment growth has slowed since mid-2022. / World Bank
By bne IntelliNews April 26, 2023

The six Western Balkan countries have seen a positive rate of employment growth, but the pace of job creation lost strength in the second half of 2022, according to a report published by the World Bank on April 25.

By the end of the year, employment in the Western Balkans contracted by over 1% which is equivalent to 72,000 fewer jobs. Albania and Montenegro are the only countries where employment levels continued to grow, while the employment levels across all other countries, except North Macedonia, slowed down despite still being above pre-crisis levels.

However, the report also states that unemployment declined across all countries in the Western Balkans, reaching 13.2% by the end of 2022, with 878,000 people unemployed in the region. This is 10.5%, or 103,000 people, fewer than a year ago.

Although the jobless rate decreased across all countries, the youth unemployment rate is still double the overall rate, and while it is declining, it remains a concern for policymakers.

The report highlights that the declining labour force and an increase in inactivity have contributed to the largest declines in the number of unemployed in Bosnia, Kosovo, and North Macedonia, while Montenegro experienced a rise in both employment and unemployment, and it also has the largest regional differences.

Serbia has the lowest unemployment rate in the region at 9.2% while Kosovo has the highest at just under 17%.

The pandemic has disproportionately affected unemployment in different regions of the Western Balkans, with most of the impact being absorbed by service-intensive regions.

In 2020, nearly 70,000 jobs were lost across Western Balkan countries, mainly in tourism-oriented economies like Albania and Montenegro, where coastal regions were hit hardest as a result of movement restrictions. At the same time, unemployment rates in capital cities such as Tirana, Belgrade and Skopje saw a modest reduction in unemployment.

The report also suggests that the regional disparities in unemployment persist throughout the crises and recovery, indicating low labour mobility.

Average jobless rate in %

2020

2021

2022 e

2023 f

2024 f

2025 f

Albania

11.7

11.5

11

-

-

-

Bosnia

15.9

17.4

15.4

-

-

-

Kosovo

25.9

20.7

-

-

-

-

Montenegro

17.9

16.7

14.7

-

-

-

North Macedonia

16.4

15.4

14.4

13.7

13.6

13.5

Serbia

9.7

11

9.4

-

-

-

 

Data

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