INTRAREGIONAL TRADE PERSPECTIVE AND UNTAPPED TRADE POTENTIALS OF THE WESTERN BALKAN REGION

Darko Lazarov and Emilija Miteva Kacarski

Goce Delcev University, Faculty of Economics, Stip, North Macedonia

The main goal of the paper is to investigate the intraregional trade performance of the Western Balkan region in the last five years and identify future intraregional trade opportunities and potentials for the period from 2023 to 2027. The methodology applied in order to explore intraregional trade is based on an analysis of the growth sources of trade at the country and product levels, while the identification of untapped regional trade potentials is based on the methodology developed by the International Trade Center (ITC), which applies the Export Potential Indicator (EPI) at the product level. The results estimated in the paper found that intraregional trade inside the Western Balkan region had had positive trends in the last five years. However, regional trade is still highly concentrated and based on a small number of traded products. The paper, however, found significant untapped regional trade potentials in the future which should be a huge motivation for each country and policymakers to work on further improvements of trade and economic conditions and circumstances for the purpose of intensifying regional trade and accelerating economic growth in these countries through it.

Keywords: regional trade integration, Western Balkan countries, untapped regional trade potential, export potential indicator (EPI)a

JEL Classification: F13, F15, O10, O57