Enlargement countries - recent economic developments

Data extracted in May 2023.

Planned article update: May 2024.

Highlights

Türkiye's economy is by far the largest among the Western Balkans and Türkiye. Measured in current prices, its GDP in 2022 was equivalent to 5.5 % of that of the EU.

GDP per person, measured in purchasing power standards (adjusted for differences in price levels) in Türkiye was 63 % that of the EU - the highest among the Western Balkans and Türkiye in 2021.

Among the Western Balkans and Türkiye, the lowest shares of industry in gross value added in 2022 were in Montenegro at 11 % (provisional data) and in Albania at 13 % (estimated). Türkiye had the highest share, at 29 %. In the EU, industry accounted for 21 % of gross value added.

Real GDP growth, 2011-2022 (% change compared with previous year)

This article is part of an online publication and provides information on a range of energy statistics for the Western Balkans and Türkiye and compares this with the corresponding data for the European Union (EU). Within this region, Bosnia and Herzegovina, Montenegro, North Macedonia, Albania, Serbia and Türkiye are candidate countries, while Kosovo has the status of potential candidate.

Data for Georgia, Moldova and Ukraine, granted candidate status or European perspective by the European Council in June 2022, are not included in this article; Statistics Explained articles on the European Neighbourhood Policy-East countries are available here.

The article provides macroeconomic information from national accounts, including the principal measure of economic activity, gross domestic product (GDP), as well as an analysis of GDP by expenditure component and gross value added (GVA) by economic sector.

* This designation is without prejudice to positions on status, and is in line with UNSCR 1244/1999 and the ICJ Opinion on the Kosovo Declaration of Independence.

Full article

Gross domestic product in real terms

Gross domestic product (GDP) is an aggregate measure of the size of an economy, based on its total final output. GDP can be calculated using different approaches: the output approach; the expenditure approach; and the income approach.

Real or constant price GDP focuses on the volume of output, ignoring price changes. The calculation of the annual growth rate of GDP at constant prices, in other words the real change in GDP, allows comparison of the dynamics of economic development, both over time and between economies of different sizes, regardless of price developments.

Table 1 shows real GDP in the Western Balkans and Türkiye, as well as in the EU, for the period 2011-2022 (or the most recent year for which data is available). The GDP of the EU, measured as chain linked volumes (2015), stood at €13 708 billion in 2022. The total GDP from the Western Balkans and Türkiye was €1 170 billion in 2022 (2020 data for Albania).

Türkiye has by far the largest GDP among the Western Balkan and Türkiye group. In 2022, measured at 2015 constant prices, it was €1 073 billion, close to 92 % of the total GDP of this group. The next largest economies among this group were Serbia, with constant price GDP of €45 billion in 2022 (provisional data); Bosnia and Herzegovina, with €18 billion; Albania (2020 provisional data), with €11 billion; North Macedonia, estimated at €10 billion for 2022; Kosovo, with €7 billion (provisional data); and Montenegro, with €4 billion (provisional).

Table 1: Gross domestic product (GDP) in real terms, 2011-2022
(€ billion, chain-linked volumes (2015))
Source: Eurostat (nama_10_gdp)

Table 2 shows the real annual growth rates of GDP year-on-year, in other words the changes in constant price GDP compared with the year before. The data used for Table 2 is therefore related to that in Table 1. For most of the Western Balkans and Türkiye, the data shows a steep decline in GDP for 2020 and a rebound in 2021 and 2022. This pattern is clearly the economic consequence of the Covid-19 pandemic. The following analysis focuses on the trend growth rate for the whole period 2011-2022; the subperiod 2011-2019, prior to the Covid-19 pandemic; and the period of the pandemic itself and the recovery, 2019-2022. The impact of Covid-19 in 2020 and earlier events are also covered.

Table 2: Real GDP growth, 2011-2022
(% change compared with previous year)
Source: Eurostat (nama_10_gdp)

Türkiye's GDP increased by the rapid annual average rate of 5.2 % over the period 2011-2022. This was the highest average growth rate among the Western Balkans and Türkiye over this period. Annual average GDP growth over the period 2011-2019, prior to the Covid-19 pandemic, was 4.8 %, again the highest in the region. Türkiye's economy actually increased by 1.9 % in 2020, the year of maximum Covid-19 impact. In 2021, the recovery from the economic impact of the Covid-19 pandemic yielded GDP growth at an extremely rapid 11.4 %, followed by more moderate growth of 5.6 % in 2022.

The average GDP growth rate in Kosovo over 2011-2022 was 3.9 %, the second highest among the Western Balkans and Türkiye. The sub-period 2011-2019 had fast average GDP growth of 4.4 %. From 2019-2022, average growth slowed to a still respectable 2.8 % as a consequence of Covid-19. The 2020 Covid-19 impact saw GDP contract by -5.3 %, the second largest such impact in the region. This was followed by a major rebound in 2021 of 10.7 % and further growth of 3.5 % in 2022 (provisional data).

Bosnia and Herzegovina had 2.6 % annual average GDP growth rate over the whole period 2011-2022. For the sub-period 2011-2019, average growth was 2.5 %. The subsequent period 2019-2022 showed only slightly faster economic growth at an average rate of 2.7 %. This was despite a fall in GDP of -3.0 % in 2020, a consequence of the Covid-19 pandemic, and largely due to the rapid 2021 rebound of 7.4 % in 2021. Growth in 2022 was 3.9 %. The 2012 decline in GDP of -0.8 % was probably a result of the European sovereign debt crisis.

Over the whole period 2011-2022, Serbia's annual average GDP growth rate was 2.3 %. As with Bosnia and Herzegovina, Serbia had faster GDP growth over the Covid-19 period 2019-2022, at an average 2.9 %, than it had during the previous 2011-2019 period, when it averaged 2.1 %. The decline in GDP in the Covid-19 impact year of 2020 was a moderate -0.9 %, followed by a strong rebound of 7.5 % in 2021 and further growth of 2.3 % in 2022 (provisional data). In common with many other economies in the Western Balkans and Türkiye, 2012 had seen a GDP decline of -0.7 %. Montenegro's GDP growth over the period 2011-2022 was an annual average of 2.2 %. In the sub-period 2011-2019, GDP growth averaged 2.8 %. Growth was negligible over 2019-2022, at an average of 0.5 %. GDP suffered a major fall in 2020 at -15.3 %, by far the largest among the Western Balkans and Türkiye. The 2021 rebound, at 13.0 %, was insufficient to make up for this, although 2022 GDP growth was a rapid 6.1 % (provisional data). In 2012, connected to the sovereign debt crisis, GDP had fallen by -2.7 %, the largest such fall in the region.

North Macedonia had annual average GDP growth over the whole 2011-2022 period of 2.0 %. Growth had been faster during 2011-2019, at an average of 2.6 % but was minimal over the Covid-19 affected period 2019-2022, at 0.4 % a year. The fall in GDP in 2020 was -4.7 % and the 2021 rebound was 3.9 % (provisional data). GDP growth in 2022 is estimated at 2.1 %. 2012 had seen a decline in GDP of -0.5 %, in common with many other Western Balkan and Türkiye economies.

Albania's average annual growth rate over the pre-Covid-19 period 2011-2019 was 2.4 %. The 2020 Covid-19 impact year saw GDP fall by -3.5 % (provisional data). Data for Albania is not available for 2021 and 2022.

In the EU, GDP growth was an average of 1.3 % over the whole 2011-2022 period, 1.5 % in the pre-Covid-19 sub-period of 2011-2019, and a more restrained 1.0 % averaged over the Covid-19 decline and recovery period of 2019-2022. The decline in real GDP in 2020 was a substantial -5.6 %, followed by a near recovery in 2021 of 5.4 % and further growth of 3.5 % in 2022. 2012 also saw a contraction, when EU GDP declined by -0.7 %.

Gross domestic product in nominal terms

Nominal or 'current price' GDP is the market value of goods and services produced in an economy, unadjusted for (so including) inflation. Nominal GDP is used as the basis for calculating constant price (real) GDP and many GDP-based indicators. Data is shown in Table 3 for the Western Balkans and Türkiye for the period 2011-2022. Since the nominal GDP data in Table 3 are provided in euro, they only differ from the constant price GDP data in Table 1 by the change in the euro price level, inflation.

GDP at current prices in the EU stood at €15 807 billion in 2022. The economies of the Western Balkans and Türkiye together generated a total GDP of €991.3 billion in 2022. Thus, their combined output was equivalent to 6.3 % of the EU's GDP at current prices.

Table 3: Gross domestic product (GDP) in nominal terms, 2011-2022
(billion €, current market prices)
Source: Eurostat (nama_10_gdp)

Gross domestic product per capita, in purchasing power standards

Analysis of GDP per capita (per inhabitant) removes the influence of the size of the population, making comparisons between different countries of different sizes easier. GDP per capita is often used as a measure of living standards within an economy. The measurement in purchasing power standards (PPS) adjusts for differences in price levels between countries. Theoretically, one unit of currency valued at PPS can buy the same amount of goods and services in each country. Figure 1 shows GDP per capita in purchasing power standards (PPS) for the Western Balkans, Türkiye and the EU in 2011 and 2021, where available.

Among the economies of the Western Balkans and Türkiye, Türkiye recorded the highest GDP per capita in Purchasing Power Standards terms in both 2011 and 2021. GDP per capita in Türkiye in 2021 was 20 340 PPS, equivalent to 63 % of that in the EU. This measure of the standard of living rose by an annual average 3.4 % over the period 2011-2021.

Montenegro recorded the second highest value of per capita GDP in both 2011 and 2021. It was 15 541 PPS in 2021, or 48 % of the living standard in the EU. Over the period, this country saw an annual average increase of 3.7 %, the highest relative increase among the Western Balkans and Türkiye.

During 2011-2021, GDP per capita in PPS terms in Serbia increased by an annual average 3.4 % to 14 352 PPS, 44 % of the EU average. This was the joint second fastest growth rate among the group. North Macedonia saw an annual average increase of 2.6 % in its GDP per capita in PPS terms over 2011-2020 (2021 data not available) to a value of 11 349 PPS (provisional data). This was the slowest increase among the Western Balkans and Türkiye, and resulted in a GDP per capita that was 35 % of that of the EU.

Annual average growth in GDP per capita in PPS terms in Albania was 3.1 %, the second slowest among the Western Balkans and Türkiye economies. This resulted in a GDP per capita measured provisionally at 10 298 PPS, 32 % of that in the EU.

In Bosnia and Herzegovina in 2011, GDP per capita stood at 7 085 PPS, equivalent to 22 % of the EU in that year. This was the lowest level of the Western Balkans and Türkiye economies for which data is available. No data is available for Bosnia and Herzegovina for 2021. Data on GDP in PPS per capita are not available for Kosovo.

Between 2011 and 2021, GDP per capita in the EU rose by an annual average 2.4 % to 32 447 PPS.

Figure 1: Gross domestic product (GDP) per capita, 2011 and 2021
(purchasing power standards)
Source: Eurostat (nama_10_pc), (nama_10_gdp) and (demo_gind)

Expenditure components of GDP

Analysing Gross domestic product (GDP) through the expenditure approach disaggregates GDP into its components: final consumption expenditure of households and non-profit institutions serving households (NPISH), general government expenditure, gross fixed capital formation, changes in inventories and acquisitions less disposals of valuables, and the external balance covering exports minus imports of goods and services. Only changes in inventories and the external balance can be negative. The share of investment in GDP is generally higher in wealthier countries than in less wealthy ones, so the share of household consumption is consequentially lower.

The shares of the expenditure components of GDP are shown in Table 4 for 2011 and 2022 (or the latest data available) for the Western Balkans and Türkiye and for the EU. Since the components must add up to 100 %, the negative values of large external deficits increase the percentage values of the other components, making comparisons between economies difficult. The net external balance is in this section calculated according to the national accounts basis. This covers exports minus imports of goods and services.

The external balance of goods and services was strongly negative in most of the Western Balkan and Türkiye economies: Montenegro had a negative balance at -35.0 % of GDP in 2020; Kosovo -32.3 % (2022 provisional data); North Macedonia -16.1 % (2021 provisional data); Bosnia and Herzegovina -14.7 % (2022 data); and Albania -13.4 % (2021 provisional data).

The external balance of goods and services was also negative in Serbia in 2022 (provisional data) at -10.7 % of GDP. In Türkiye, the external balance of goods and services in 2019, prior to the Covid-19 pandemic, was positive at 2.3 % of GDP; more recent data for the external balance is not available for Türkiye. The EU, as an economically developed region, ran an external surplus of 1.7 % in 2011; in 2021, its surplus was close to the same level, at 1.5 % of GDP.

Kosovo had the highest share of final consumption by households and non-profit institutions serving households among the Western Balkans and Türkiye, at 85.9 % of GDP in 2022 (provisional data). It was followed by Montenegro, at 81.2 % in 2020. Albania had a household consumption share of 76.7 % of GDP in 2021 (provisional data).

Three regional economies had similar shares of household consumption in GDP: Bosnia and Herzegovina at 67.9 % in 2022; North Macedonia, 67.7 % in 2021 (provisional data); and Serbia, at 67.6 % of GDP in 2022 (provisional data). Türkiye in 2019, prior to the Covid-19 pandemic, had a household consumption share of GDP at 57.0 % of GDP.

Final consumption expenditure of households and non-profit institutions serving households accounted for 52.3 % of EU GDP in 2022.

Investment expenditure, measured as gross fixed capital formation, accounted for a share of GDP in Kosovo of 31.8 % in 2022 (provisional data); in Montenegro, 27.9 % in 2020; in Türkiye, 25.9 % in 2019. The remaining economies, North Macedonia, Albania, Serbia, and Bosnia and Herzegovina, recorded comparable percentage values of fixed capital formation for the most recent year available, ranging between 24.4 % and 21.5 %. Investment represented 22.7 % of EU GDP in 2022.

Higher income countries also tend to have higher values for final government expenditure on final purchases of goods and services as a share of GDP, although structural factors and policy choices also play a part. While the highest shares of government expenditure in GDP were in Montenegro in 2020, at 22.6 % of GDP; and Bosnia and Herzegovina, at 19.0 % in 2022, these figures are inflated, as previously discussed, by the large external imbalances. Comparison with Türkiye's 2019 figure of 15.4 % is not straightforward. Albania's 2021 provisional figure of 11.9 % of GDP is again difficult to compare with Kosovo's 2022 provisional figure of 11.6 % of GDP, given that Kosovo's negative external balance in goods and services was substantially greater. North Macedonia's government expenditure was 16.0 % of GDP in 2021 (provisional data), while Serbia's was 16.3 % of GDP in 2022 (provisional data).

Changes in inventories / stocks tend to fluctuate from year to year.

Table 4: Expenditure components of GDP, 2011 and 2022
(% relative to GDP)
Source: Eurostat (nama_10_gdp)

Gross value added by economic activity

Analysis of the gross value added (GVA) by economic activity is useful to illustrate the structure of an economy and its changes over time. The analysis is limited by the fact that the 'services' category itself contains a wide variety of activities, such as government, transport services, tourism and business services. The proportion of construction in an economy typically varies over the economic cycle, with the sector doing well in periods of high growth and often contracting during recessions. The data are shown in Figure 2 for 2011 and 2022.

The size of the agriculture, forestry and fisheries sector accounted for an estimated 21.3 % of Albania's gross value added in 2022, by far the largest share among the Western Balkans and Türkiye for this sector. The second highest sector share was in Kosovo, at an provisional 9.2 %, and the third highest in North Macedonia at an estimated 9.0 %. The lowest share of the agriculture, forestry and fisheries sector was found in Bosnia and Herzegovina, at 5.6 %. The second lowest was in Türkiye, at 6.2 % in 2020.

From 2011 to 2022, Albania saw a marginal increase (+0.4 percentage points (pp)) in the agriculture, forestry and fisheries sector's share in total GVA. Elsewhere in the region, this sector's share decreased. The greatest sector share decrease was found in Türkiye at -3.1 pp, while the second largest decrease was in Bosnia and Herzegovina, at -2.3 pp. The EU had a sector share of 1.9 % for agriculture, forestry and fisheries in 2022, unchanged on the 2011 figure.

Türkiye had the highest share of industry in gross value added within the Western Balkan and Türkiye group in 2022, at 29.1 % (provisional). The second highest share was in Bosnia and Herzegovina at 25.1 %, followed closely by Kosovo at 24.7 % (provisional), Serbia at 21.4 % (provisional) and North Macedonia at 19.4 % (estimate). Albania at 13.4 % (estimate) and Montenegro at 11.2 % (provisional) had clearly lower industry shares. The EU had a share of industry in gross value added of 20.6 % in 2022, up by 0.5 pp from 2011.

Türkiye's share of industry in gross output increased by 6.7 pp over the period 2011-2022. The industry share of gross output in Bosnia and Herzegovina increased by 3.7 pp over 2011-2022. By contrast, in Serbia the sector's share fell by -5.7 pp. Changes in other countries were more restricted.

Services accounted for between 54.1 % of total gross value added in Albania (estimate) and 75.8 % in Montenegro (provisional). The sector shares increased over 2011-2022 by 4.1 pp in Serbia; by 3.4 pp in Montenegro; and by 3.2 pp in Albania. Elsewhere, changes in the sector's share of gross output were limited. In the EU, the share of services in gross value added was 71.9 % in 2022, down by -0.5 pp from 2011. Since the overall services sector is made up of a disparate range of sub-sectors, it is difficult to draw many conclusions.

Figure 2: Gross value added by economic activity (NACE Rev 2), 2011 and 2022
(% of total gross value added)
Source: Eurostat (nama_10_a10)

Source data for tables and graphs

Western Balkans and Türkiye — economic developments: tables and figures

Data sources

The Western Balkans and Türkiye are expected to increase the volume and quality of their data progressively, and to transmit these data to Eurostat and the wider ESS in the context of the EU accession process. The final objective of the EU in relation to official statistics is to obtain harmonised, high-quality data that conforms to both European and international standards. More details on the statistical aspects of the accession process can be found in the article Enlargement policy and statistical cooperation.

The Western Balkans and Türkiye are not at the same level of development and are progressing towards an efficient and modern statistical system at different speeds. In a number of areas, candidate countries (and sometimes also potential candidates) are in a position to provide harmonised data in accordance with the EU acquis with respect to methodology, classifications and procedures for data collection and the principles of official statistics as laid down in the European statistics Code of Practice. In these cases, the candidate countries (and potential candidates) concerned report their data to Eurostat following the same procedures and under the same quality criteria as the EU Member States and the EFTA countries. Data from the Western Balkans and Türkiye that meet these quality requirements are published along with data for EU Member States and EFTA countries.

In addition, the Western Balkans and Türkiye provide data for a wide range of indicators for which they do not yet fully adhere to the quality requirements specified in the EU acquis and the methodology, classifications and procedures for data collection specified in the relevant Regulations, Directives and other legal documents. These data are collected on an annual basis through a questionnaire sent by Eurostat to the Western Balkans and Türkiye. A network of contacts has been established for updating these questionnaires, generally within the national statistical offices, but potentially including representatives of other data-producing organisations (for example, central banks or government ministries). This annual exercise also provides an opportunity to provide methodological recommendations.

The European system of national and regional accounts (ESA) provides the methodology for national accounts in the EU. Data for the EU and the Western Balkans and Türkiye were compiled under ESA 2010, which is consistent with worldwide guidelines for national accounts, namely, the United Nations' system of national accounts (the 2008 SNA).

All statistics presented in this article as monetary values are based on current price series, unless otherwise stated.

The main aggregates of national accounts are compiled from institutional units, namely non-financial or financial corporations, general government, households and non-profit institutions serving households (NPISH). Within the expenditure approach, only households and NPISH and government have final consumption (corporations are considered to have intermediate consumption). Private final consumption expenditure is defined as expenditure on goods and services for the direct satisfaction of individual needs, whereas government consumption expenditure includes goods and services produced by government, as well as purchases of goods and services by government, that are supplied to households as social transfers in kind. Gross capital formation is the sum of gross fixed capital formation, the change in inventories (stocks) and the net acquisition of valuables. The external balance is the difference between exports and imports of goods and services. Depending on the size of exports and imports, it can be positive (a surplus) or negative (a deficit).

While basic principles and institutional frameworks for producing statistics are already in place, the Western Balkans and Türkiye are expected to increase progressively the volume and quality of their data and to transmit these data to Eurostat in the context of the EU enlargement process. EU standards in the field of statistics require the existence of a statistical infrastructure based on principles such as professional independence, impartiality, relevance, confidentiality of individual data and easy access to official statistics; they cover methodology, classifications and standards for production.

Eurostat has the responsibility to ensure that statistical production of the candidate countries and potential candidates complies with the EU acquis in the field of statistics. To do so, Eurostat supports the national statistical offices and other producers of official statistics through a range of initiatives, such as pilot surveys, training courses, traineeships, study visits, workshops and seminars, and participation in meetings within the European Statistical System (ESS). The ultimate goal is the provision of harmonised, high-quality data that conforms to European and international standards.

Tables in this article use the following notation:

Value in italics	data value is forecasted, provisional or estimated and is therefore likely to change;
:	not available, confidential or unreliable value.

Context

National accounts provide an internationally agreed standard for compiling measures of economic activity through a coherent, consistent and integrated set of macroeconomic accounts. These accounts record how economic activity is distributed among businesses, consumers, government and foreign countries, detailing key items such as production, consumption, savings and investment. The use of internationally accepted concepts and definitions permits an analysis of different economies, such as the interdependencies between the economies of the EU Member States, or a comparison between the EU and non-EU countries.

Within the EU, multilateral economic surveillance was introduced through the stability and growth pact, which provides for the coordination of fiscal policies. The future of the Stability and Growth pact is currently under discussion.

Economic statistics have become one of the cornerstones of global, regional and national governance, for example, to analyse national economies during the global financial and economic crisis or to put in place EU initiatives such as the European semester or macroeconomic imbalance procedures (MIP).

Additional information on statistical cooperation with the candidate countries and potential candidates is provided here.