The Impact of Import, Export and FDI on the Economic Growth of the Western Balkans Countries

Abstract

Macroeconomic stability is one of the important factors influencing the growth and development of national economies in today’s modern global economy. Economic policy should create conditions for macroeconomic stability and economic growth based on increased investment, exports, savings, productivity, and competitiveness, while reducing macroeconomic imbalances, especially the fiscal deficit, inflation, and the current account deficit. In order to achieve macroeconomic stability, as well as sustainable economic growth, it is important to pursue a rational economic policy and carry out accelerated structural reforms. The main objective of the paper is to analyze the impact of key indicators, i.e., export and import of goods and services and FDI on economic growth of the Western Balkans countries. Such an analysis is important to show the state of the economy and predict its stability. The research focuses on the countries of the Western Balkans, while the analysis uses secondary data from the UNCTAD database for the period 2011-2020. The research results indicate that Serbia is progressing much faster than other countries of the Western Balkans. In the coming period, a growth trend can be expected in all Western Balkan countries, which will result in better economic development and increasing openness to new investments.