The Regular Economic Report No. 17 is a collection of notes on the economic and social impact of COVID-19 on the Western Balkans region, published in three parts. The first part includes three Notes:
- Setting the Stage: Reviewing the state and vulnerabilities of the Western Balkan еconomies as they face COVID-19
- Outlook: Hard Times Require Good Economics
- Western Balkan Country Notes
The second part shows how the macroeconomic impact affects the people in the region. It discusses the social impact of COVID-19 on poverty and welfare, labor, health, education, air pollution, and social protection in the Western Balkans. The third part focuses on specific economic policy response areas —fiscal, external, and financial sector— and the crisis impact on the private sector as reported by firms.
The Western Balkans region is projected to enter a recession in 2020, whose magnitude depends on the duration of the COVID-19 outbreak in Europe
In the baseline scenario, the recession would be considerable, with growth in the region contracting by about 3 percent but with substantial differences by country based on economic structure and pre-crisis vulnerabilities. Assuming the COVID-19 outbreak is largely contained by mid-2020 - allowing economic activity to resume as measures to contain the virus are lifted and financial market and supply-chain disruptions ease - real GDP growth for the year would fall by 3.1 percent.
In the downside scenario, growth in the Western Balkans would fall by about 5.7 percent in 2020, causing a more severe recession than the global financial crisis. In the downside scenario, the outbreak lingers so that containment measures cannot be lifted until late in August, with economic activity beginning to recover only in the fourth quarter.