After a multi-year period marked by a pandemic, strong inflationary pressures, disruptions in supply chains and geopolitical crises, the world economy enters the year 2026 with a dose of cautious optimism.
Leading international financial institutions and respected economists agree that a new major global recession is not expected, but neither is the strong economic momentum that characterized certain phases of earlier recoveries.
According to the latest estimates of the International Monetary Fund (IMF), global growth will remain positive but moderate, with a projection of world GDP growth of around 3.1% in 2026. In addition, the IMF points out that risks are still highlighted due to the slowdown in trade, market fragmentation and the growth of protectionist measures.
Fragile beneath the surface
“The global economy may appear stable, but it remains fragile beneath the surface. Growth is slowing, trade is fragmenting and financial vulnerabilities are deepening. Growth prospects for 2026 remain vulnerable to a range of risks,” Santander writes.
Global inflation is expected to decrease further in most countries, which opens up space for a more cautious monetary policy and possible reduction of interest rates in some regions. However, economists warn that the trend of growth and living standards will be uneven among regions, with clear differences between more successful and slower growing economies.
For the countries of the Western Balkans, the year 2026 brings a continuation of moderate but limited economic growth. Estimates indicate that the region will continue to lag behind the European Union average and global growth, mostly due to long-term structural weaknesses.
The key sources of growth in the region remain the service sector, tourism and remittances from the diaspora, which continue to be an important pillar of household consumption.
Certain infrastructure projects and investments associated with European funds could bring short-term benefits, but will not be sufficient for a substantial shift in long-term economic development.
According to the World Bank, the economies of the Western Balkans show resilience, but also a clear potential for improvement through structural reforms.
“We are seeing some positive economic trends in the Western Balkans that point to the region’s resilience and should support solid economic growth. Lower inflation and wage growth are encouraging consumption, and public investment is starting to pick up,” said Xiaoqing Yu, the World Bank’s director for the region.
However, experts warn that important challenges remain. First of all, high unemployment and the departure of the workforce, wage growth that does not keep up with the cost of living, low productivity and limited competitiveness of the economy, and sensitivity to external economic shocks.
In Bosnia and Herzegovina, the year 2026 is expected to be a period of cautious stabilization, but without a significant improvement in living standards. Although the economy is showing some signs of recovery, especially in the service, retail and tourism sectors, growth remains slow and uncertain. High unemployment and the departure of the labor force abroad, especially young and qualified personnel, make the situation even more difficult, while the uneven growth of wages does not follow the growth of the cost of living and basic foodstuffs, according to economists.
Limited competitiveness of the economy
Low productivity and limited competitiveness of the economy make it difficult to attract foreign investments, and external shocks, such as changes in energy prices or economic turbulence in the EU, directly affect the stability of the domestic economy.
Experts and economic institutions emphasize that without structural reforms, increased investments and strengthening of the private sector, Bosnia and Herzegovina will not be able to use its full economic potential in the coming year.
Nevertheless, certain infrastructure and development projects, as well as international support, can alleviate negative trends in the short term and encourage slow but stable growth.
Slow and uncertain economic growth means that citizens’ household budgets will continue to be under pressure, the prices of basic products will rise more slowly than wages, and the standard of living will not increase significantly. Citizens will still have to carefully plan their expenses, while those who plan larger investments or starting a business will have to count on challenges in attracting financial support and market competitiveness.
Basically, if it doesn’t get worse, according to these estimates, it will hardly get better, he writes Report.
