Page 8 - bne IntelliNews Southeastern Europe Outlook 2025

for both manufacturing and IT services, but smaller economies such as Serbia and North Macedonia have become increasingly prominent in sectors such as automotive components. The region’s catchup potential – all 11 Southeast European economies except Slovenia are poorer than their Central European counterparts in per capita terms – is helping drive faster growth.
Ever since the invasion of Ukraine nearly three years ago there has been concern that Russia could seek to step up its interference in the Balkans to destabilise the region and distract the West from its support for Ukraine. So far this has not happened, but there are several ongoing situations to watch.
Bosnia remains unstable, with Bosnian Serb leader Milorad Dodik – a Putin ally who has several times visited Moscow since the invasion of Ukraine – continuing to foment discord with rhetoric about the secession of Bosnia’s Serb entity Republika Srpska and steps to reject the authority of Bosnia’s state-level institutions.
The situation in northern Kosovo, mainly populated by ethnic Serbs, has become increasingly unstable. There have been several violent incidents, the most serious being the killing of a Kosovan border guard by an armed Serb gang. Meanwhile, under Kurti Pristina has been seeking to stamp its authority on the northern region, sparking protests by local Serbs and international criticism. There are hopes in Belgrade that the return of Donald Trump to power in the US may lead to a more Serb-friendly stance from Washington.
An energy crisis caused by the cut-off of Russian gas supplies at the beginning of January threatens to undermine stability in Moldova, where the pro-EU Party of Action and Solidarity (PAS) is seeking re-election this spring. PAS leader President Maia Sandu held onto her position in October 2024, despite large-scale Russian interference. However, a hike in energy costs will be damaging for the PAS.
Meanwhile a humanitarian crisis is unfolding in the Russia-backed separatist Transnistria region, which until January 1 imported Russian gas both for its own use and to produce electricity to supply the entire country. There is speculation Tiraspol – which has refused help to ease the crisis – could exploit the situation to destabilise the country as whole and make a renewed bid for independence.
8 SE Outlook 2025 www.intellinews.com