The economies of the Western Balkans should cooperate with the EU, but also seek new markets

The economies of the Western Balkans will this year also depend on global stability, but it can already be expected that Serbia will stabilize and slightly increase inflows of foreign direct investment, while in Kosovo foreign investments will continue to grow and are expected to exceed one billion euros.

Written by: Darko Savanovic

Assistant Professor at the Faculty of Economics in Belgrade, Veljko M. Mijuskovic, believes that in Serbia it can be expected that the announcements of the country’s leadership will be confirmed—that 2026 will be the best development year so far, linked to numerous plans, micro-projects, and one broader major project, Expo 2027, which should significantly improve the country’s performance both infrastructurally and economically.

Kosovo, whose economy is significantly dependent on imports, expects its economic situation to be improved by diaspora remittances, which continue to show a growing trend, and in 2026 are expected to exceed 1.5 billion euros.

North Macedonia, which according to a World Bank report lags behind other countries in the region in terms of economic growth, should, as proposed by economic analyst Abil Bausch, take the right steps in capital investments in order to achieve economic growth.

When it comes to whether the economies of the region should primarily cooperate with the European Union or also seek other markets worldwide, Bausch responds affirmatively, while Mijuskovic believes that Serbia’s economy has an obligation and a necessity to cooperate with a larger number of entities globally.

The Head of Business Administration and Information Technologies at the Canadian Institute of Technology in Tirana, Enrico Ceko, believes that for the countries of the Western Balkans, a strategic connection with the European Union is essential, but that this does not mean they should take on all the risk and become Europe’s “tail.”

As he pointed out, the European Union does not have natural resources; rather, Europe’s natural resources are located in Southeastern Europe, and most of them are in the Balkans, which represents an advantage for the region.

Veljko M. Mijuskovic expressed the expectation that this year there will be stabilization and a slight increase in foreign direct investment in Serbia, and assessed that Expo should significantly improve the country’s economic performance.

“If we speak specifically about Serbia, we could also hear from the country’s leadership that the best development year so far is expected, linked to numerous plans, micro-projects, and one broader major project—EXPO 2027—which, both infrastructurally and economically, should significantly improve the country’s performance,” Mijuskovic said in an interview with Kosovo Online.

As he emphasized, this is in some way accompanied by an increase in wages and pensions, which ensure continuous growth and maintain citizens’ living standards.

Asked whether the Serbian economy should be more closely tied to the European Union or seek entirely new markets, he said that “Serbia is a small open economy and, as such, has an obligation and a necessity to cooperate with a larger number of entities at the global level.”

“In that sense, different pillars of economic and business cooperation should be strengthened—further cooperation not only with China, not only with the European Union, but also with other Asian and African countries, as well as the United States. In other words, diversification of economic activity as a future prerogative for our economy,” Mijuskovic said.

He noted that he expects stabilization and a slight increase in foreign direct investment this year, although, as he said, at the beginning of the year the situation is still very uncertain and it would be imprecise to define exact percentage shares.

The Governor of the Central Bank of Kosovo, Ahmet Ismaili, stated that Kosovo’s economy remains highly dependent on imports, but that foreign direct investment is recording significant growth and is projected to exceed one billion euros this year.

In an interview with Kosova Press, he said that in the first nine months of last year, foreign direct investment in Kosovo amounted to around 730 million euros, and that it is expected, according to projections, to total around 950 million euros in 2025.

“For 2026, we project that the amount of foreign investment will exceed one billion euros,” Ismaili emphasized.

The CBK Governor said that economic growth last year is estimated at around four percent, while growth of about 4.1 percent is projected for this year.

Speaking about developments in foreign trade, Ismaili stressed that Kosovo’s economy continues to be characterized by high import dependence, while exports have slowed.

“Due to the structural problems it has, Kosovo’s economy remains predominantly dependent on imports. In the past year, we even saw a slowdown in exports, which largely occurred due to a number of isolated factors, while imports continued to grow,” Ismaili said.

According to the CBK Governor, diaspora remittances continue to show a growing trend and are expected to reach a high level by the end of the year, with positive projections for the following year as well.

“By the end of the most recent data we have, for October, they amounted to around 1.05 billion euros. We expect remittances to reach around 1.4 billion euros in 2025, which would represent growth of about 3.8 percent. We project similar growth for this year as well, around 3.5 to four percent,” Ismaili emphasized.

Economic analyst from Skopje, Abil Bausch, assessed that the economies of the region are “umbilically tied” to the economies of the European Union and should focus on the European market.

“We are naturally connected to the European Union. Therefore, we will have to use the opportunities to be part of that European Union, to use their funds, in order to be competitive in those markets. Beyond that, the markets of the United States and China are too large for us here to take any kind of fan-like move or partisan stance,” Bausch told Kosovo Online.

He emphasized that, according to the latest World Bank reports, the economies in the region will have to pay more attention to certain characteristics highlighted as particularly important for Western Balkan economies.

“Everything depends on the nature of the Western Balkan countries and how they pass through certain phases. Some states are experiencing economic growth. For example, according to that World Bank report, Serbia, Albania, Montenegro and other states are much more advanced than Macedonia,” Bausch said.

According to him, Macedonia needs to take the right steps in capital expenditures, that is, capital investments, in order to achieve economic growth.

“Looking at the budgets of all Western Balkan states, you will see that they are already, so to speak, redirecting toward certain other things, rather than toward capital investments. Everything somehow goes toward defense, toward investing in defense, and so on, which at some point will prove to be a policy that does not generate economic growth,” Bausch said.

The Head of Business Administration and Information Technologies at the Canadian Institute of Technology in Tirana, Enrico Ceko, stated that for the countries of the Western Balkans, a strategic connection with the European Union is essential, but that this does not mean they should take on all the risk and become Europe’s “tail.”

As he emphasized, the European Union does not have natural resources; rather, Europe’s natural resources are located in Southeastern Europe, and most of them are in the Balkans, which is an advantage for the region.

In this situation, he stressed, an element that works in favor of everyone in the region—Albania, Serbia, Kosovo, Montenegro, North Macedonia, Bosnia—is the fact that the EU has two very important tools: IPA funds and the Western Balkans Fund.

According to him, China is a very interesting partner, especially with the “Belt and Road” project for financing very important projects, including in the Western Balkans—projects in road infrastructure and railways—but care must be taken to avoid turning the region into a place where low-quality products accumulate.

“China has products of very good quality. Therefore, the goal should be to view relations with China in terms of quality, safety, and product guarantees, because at the moment we enter Europe, the products and services that enter our territory must meet EU standards. So we can cooperate with China, but the priority remains products that comply with EU standards. This needs to be defined from the very beginning, even before integration into Europe,” Ceko told s.