EBRD: Gradual Recovery in South East Europe

The recovery in Romania and Bulgaria, on the other hand, will likely be slowed by fiscal tightening, the bank said.

The bank forecasts that the economies of South East Europe as a whole will grow 1.2 per cent during 2010 and expand 2.6 percent in 2011, following a 5.4 per cent decline in 2009.

It noted that there is significant disparity between countries in the region, with Albania’s economy showing the greatest resilience to the global down turn, and growing 4.3 per cent during 2009, but forecasting a decline in the rate of growth to 2 per cent in 2010 and 3.9 per cent in 2011.

Macedonia’s economy, whose flagship metal, textile and construction industries all faced serious troubles, is expected to have shrunk 1.2 per cent in 2009, but rebound to grow 2 per cent this year and increase to 3.8 per cent in 2011.

Serbia’s economy is expected to have shrunk 3.1 per cent last year, but rise 2.4 per cent this year, and 3.2 per cent in 2011.

The bank expects Romania’s economy to recover this year, and grow 1.3 per cent after contracting 7 per cent last year, but for growth to remain weak and average 2.3 per cent in 2011.

Likewise it forecasts Bulgaria’s growth remaining static in 2010, after declining 4.8 per cent last year, but recovering and growing a modest 2.7 per cent in 2011.

It also expects sluggish growth in Bosnia, whose economy it expects to have contracted 4.4 per cent in 2009, grow 0.6 per cent this year and 1.9 per cent in 2011.