Published : 2025-08-01

The determinants and forecast of public debt in the Western Balkan countries

Kinga Kozak



Natalia Kurek



Abstract

The purpose of this article is to assess the impact of Gross Domestic Product (GDP), inflation, unemployment rate, remittances from individuals and foreign direct investment on the public debt of the Western Balkan countries. The analysis will test whether the projections created by the model are close to the actual debt of the region. The least squares method (LSM) was used in the study. The results show that the intensity of factors affecting public debt varied in each country. According to the correlation table, in every country except Serbia, remittances from individuals had the greatest impact on public debt, while in Serbia it was inflation. The use of the LSM method proved to be adequate. The study showed that deviations of forecasts from reality were small. The model was accurate and prediction errors were negligible. According to the results, it can be used to forecast public debt in other countries.

Keywords:

Western Balkans, public debt, least squares method, linear regression model, prediction



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Kozak, K., & Kurek, N. (2025). The determinants and forecast of public debt in the Western Balkan countries. Zeszyty Naukowe Wyższej Szkoły Bankowej W Poznaniu, 108(1). https://doi.org/10.58683/dnswsb.2065

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Uniwersytet WSB Merito w Poznaniu
ul. Powstańców Wielkopolskich 5
61-895 Poznań
e-mail: journals@poznan.merito.pl
University
Uniwersytet WSB Merito w Poznaniu / WSB Merito University
ul. Powstańców Wielkopolskich 5
61-895 Poznań

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