In 2013, GDP growth was stronger than expected in all pre-accession countries, except in Albania.

It accelerated in year-on-year terms  in the fourth quarter in three out of the five countries where data are available, namely the former Yugoslav Republic of Macedonia, Montenegro and Turkey while it decelerated somewhat in Serbia and Iceland. GDP growth is also expected to have increased in Bosnia and Herzegovina and stabilised in Kosovo*. Albania is thus the sole country where the growth rate declined in 2013. In spite of sharply differentiated evolutions across countries in the fourth quarter, higher growth rapidly translated into an improvement in labour market conditions in 2013 except in Montenegro and Turkey where unemployment increased. In Albania, the deterioration of the labour market reflected weak economic activity.

The gradual adjustment of macro-economic imbalances continued in most countries. Data for the fourth quarter confirm the pursuit of a disinflationary trend over 2013 and in most cases in January-February 2014 , even leading to deflation in Montenegro and in Bosnia and Herzegovina. In Turkey, inflationary pressures have increased again since mid-2013. Except in Turkey and Albania, current account deficits further narrowed, particularly in Iceland where the deficit turned into surplus and in Serbia where it halved. On the other hand, fiscal positions are uneven and public debts continue their upward trajectories in the Western Balkans.

Download the full issue of EU Candidate and Pre-Accession Countries Economic Quarterly here