Data from the International Labor Organization (ILO) show that labor productivity remains one of the major challenges facing the Western Balkan countries. Albania ranks at the bottom and Montenegro at the top of the region, while Serbia occupies a middle position.

According to the latest available estimates by the International Labor Organization (ILO), Albania’s gross domestic product per hour worked stood at 18.7 international dollars in 2025, down 4.1 percent from the previous year. Albania thus had the lowest labor productivity among the Western Balkan countries for which the ILO publishes comparable data.

Albania was followed by Bosnia and Herzegovina at 26.3 dollars per hour, Serbia at 29.8, Montenegro at 31.1 and North Macedonia at 34 dollars. The ILO does not provide comparable data for Kosovo in this series. At the same time, the global average stood at 23.3 international dollars per hour worked.

Although the ILO does not provide data for Kosovo, the World Bank has used a labor productivity indicator for Kosovo in its analyses of the Western Balkans. According to these analyses, labor productivity in Kosovo declined by approximately 1.4% in 2023. It fell by 1.1 percent in 2022, while growth of just 0.4 percent was recorded in 2021.

The overall picture is therefore not particularly favorable: Kosovo’s economy is growing, but a proportional increase in productivity has not accompanied growth in employment and wages.

These indicators do not show how much a worker earns, but rather how much economic value is generated per hour worked. The ILO measures labor productivity as the ratio of gross domestic product to the total number of hours worked by employed persons, with the data expressed in international dollars at purchasing power parity for the purposes of international comparison.

A particularly important question is what the countries of the region can do to increase productivity without relying on longer working hours. Investment in new technologies, digitalization, education and professional skills, innovation and modern equipment forms only part of the answer. The business environment, quality of management and the movement of workers from lower-value-added to higher-value-added sectors also play a significant role.

Commenting on the latest data, President of the Kosovo Chamber of Commerce Lulzim Rafuna told Kosovo Online that Kosovo has not yet reached the desired level of labor productivity, but that efforts are being made and gradual progress is being achieved.

According to Rafuna, there are certain differences in labor productivity across the Western Balkans.

Asked about the consequences for the economy and gross domestic product when productivity is low, Rafuna said that they were, naturally, unfavorable.