Economics & Development

This note examines how the survival of Serbia’s export relationships and its association with non-tariff measures (NTMs) vary across inland customs offices, land border-crossing points, and river ports. Using annual product–partner country–customs clearance channel data for 2020–2024, we estimate discrete-time hazard models separately for each channel. The sample covers products exported in 2019 by firms that both imported and exported. Export relationships are most durable at land border-crossing points and least durable at inland customs offices. Serbia’s bilateral import-side NTM indicator is associated with a significantly higher probability of export exit in all three channels. Coverage raises the annual probability of exit by about 1.4 to 3.2 percentage points for the composite indicator, with the largest association at land border-crossing points; for sanitary and phytosanitary measures, the association is about 3 percentage points at both inland customs offices and land border-crossing points. An alternative indicator covering measures applied to all trading partners yields a statistically significant association only at river ports. These estimates capture conditional associations with the regulatory status of exported product–partner lines; they do not establish causality or measure individual firms’ exposure to regulated inputs. The findings support diagnostics of regulatory and logistics constraints tailored to each customs-clearance channel to inform trade-facilitation reforms.

Despite inflationary pressures following the Middle East conflict, Ethiopia’s macroeconomic conditions improved two years into its reform program. In FY2025/26, growth remained robust, exports and revenues increased, and reserves strengthened. The foreign exchange parallel market premium narrowed as the National Bank of Ethiopia (NBE) implemented measures to improve market functioning. Sustaining these gains will depend on maintaining reform momentum.

Zambia’s economy strengthened in 2026, supported by agriculture, improved electricity supply, easing inflation, and a stronger external position. Real GDP growth is projected to average 5.2 percent during 2026–2028 but remains insufficient to reduce poverty rapidly. High poverty, limited formal job creation, debt vulnerabilities, dependence on mining, and climate and global risks underscore the need for reforms to support inclusive growth and better jobs.

Growth is expected to remain around 1 percent in 2026 before gradually strengthening through 2028, supported by improving infrastructure performance, although weaker external demand and higher oil prices will weigh on activity. The recovery will remain too weak to materially reduce unemployment or poverty. With public debt near 80 percent of GDP, maintaining fiscal consolidation while protecting growth-enhancing and inclusive spending remains critical.

Real GDP growth is expected to slow from 3.1 percent in 2025 to 2.5 percent in 2026 as declining external aid, adverse climate conditions, and external shocks weaken domestic demand. The prolonged Middle East conflict has contributed to higher food, fuel, and transport costs, while drought conditions constrain agricultural output. The outlook remains highly uncertain, with risks tilted to the downside.

Gains from Sierra Leone’s economic recovery in 2025 face risks from spillovers from the Middle East conflict, intensifying pressures from fiscal and external imbalances, inflation, food insecurity, and extreme poverty, estimated at about 46 percent (US$3.00 line) in 2025. Stronger policy buffers and reforms to strengthen public financial management, governance, and the investment climate are essential to build resilience, stimulate job creation, and restore progress toward poverty reduction.

GDP growth is forecast to increase modestly to 1.9 percent in 2026 and 2.9 percent in 2027, driven by new energy and mining projects. With lower Southern African Customs Union (SACU) revenues, maintaining fiscal discipline is key to putting public debt on a declining path. Due to modest growth and high unemployment, the poverty rate is projected at 28 percent in 2026 (US$3.00 per person per day, 2021 PPP).

Sudan's economic recovery remains fragile and highly dependent on the trajectory of the conflict. Localized improvements in security and the partial recovery of economic activity are expected to support modest growth. However, ongoing insecurity and conflict-related disruptions will continue to constrain broader recovery. Fiscal pressures, foreign exchange shortages, elevated inflation, and rising importand production costs are expected to weigh on economic activity and macroeconomic stability.

Gains from Sierra Leone’s economic recovery in 2025 face risks from spillovers from the Middle East conflict, intensifying pressures from fiscal and external imbalances, inflation, food insecurity, and extreme poverty, estimated at about 46 percent (US$3.00 line) in 2025. Stronger policy buffers and reforms to strengthen public financial management, governance, and the investment climate are essential to build resilience, stimulate job creation, and restore progress toward poverty reduction.

Afghanistan’s economy continues to grow, but not enough to improve living standards. Growth is projected to slow to 3 percent in FY2026, driven by a post-drought harvest rebound and construction, while services and private investment contract amid shrinking aid and disrupted regional trade. As returnees swell the population, per capita income remains broadly flat, while rising inflation further strains poor households and vulnerable families.

Real GDP is projected to contract by 6.4 percent in 2026, reversing the rebound recorded in 2025, as the escalation in hostilities weighs on tourism and consumption. Inflation is expected to accelerate to 17.5 percent, driven by conflict-related supply disruptions and higher energy and transport costs. The economic outlook remains highly uncertain and contingent on the volatile security situation and geopolitical developments in the wider Middle East.

Türkiye's stabilization program continues, but disinflation has slowed and the rise in regional tensions has disrupted reserve accumulation. Inflation is expected to reach 29.3 percent at end-2026, while growth is projected at 2.8 percent in 2026, before strengthening to 3.8 percent in 2027. Maintaining tight policies, strengthening fiscal discipline, and protecting vulnerable households remain central to sustaining the adjustment.

Bulgaria’s growth has remained resilient amid another external shock, supported by strong domestic demand. Rapid wage growth and fiscal expansion buoyed activity at the cost of higher inflation and widened deficit. The 2026 budget deficit is projected to reach a record high, requiring difficult medium-term consolidation. Growth is expected to slow to 2.6 percent in 2026–27 as fiscal tightening and weak external demand weigh on activity.