THE IMPACT OF COVID-19 ON WESTERN BALKANS ECONOMIES
Abstract
Western Balkans, consisting of Bosnia and Herzegovina, Serbia, Kosovo, NorthMacedonia, Albania and Montenegro, is one of the regions that have been heavilyaffected by the Covid-19 pandemic. Although the numbers are relatively low compared toother countries affected by the virus, the region's fragile political and economiccircumstance have made it vulnerable to the pandemic. The violent breakup ofYugoslavia continue to affect the region's international relations and domestic politics.Furthermore, Western Balkan states are some of the few European countries that are stillnot members of the European Union (EU) .Every day, people are losing jobs and income, with no way of knowing when normalitywill return. The Western Balkans rely heavily on the steady inflow of remittances, whichfinancing domestic demand and investment. Remittances, which constitute 10% of theGDP in these countries , are likely to diminish because of travel restrictions andincreased unemployment in the countries of Western Europe. [1]. The World Bankprojects a US$110 billion decline in remittances this year, which could mean 800 millionpeople will not be able to meet their basic needs [2]. Due to business shutdowns, supplysidedisruptions, reduce household incomes, depress demand these countries results infall in gross domestic product.To mitigate the social impacts of the crisis, governments in all six countries haveintroduced measures to support households and businesses. To ease the effects of thepandemic, governments in the region have turned towards international institutions suchas the World Bank, International Monetary Fund (IMF) and the EU for financial assistance.As these countries do not have sufficient health infrastructure to deal with a widenumber of cases, these support have been useful to contain the spread of the virus.
Problem melden