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Balkan Economies: Fragile Recovery in 2010
Tirana | 15 October 2009 | Besar Likmeta
Financial markets are still in their infancy in the Balkans
This, following steep output declines in the first half of the year, an EBRD report, released on Thursday says.
A fragile economic recovery will be registered in the Balkans in 2010. However, any upturn is likely to be fragile and patchy. The region is expected to rebound with only 0.6 per cent GDP growth next year.
A fragile economic recovery will be registered in the Balkans in 2010. However, any upturn is likely to be fragile and patchy. The region is expected to rebound with only 0.6 per cent GDP growth next year.
“It is clear that the social costs of the global economic crisis are only likely to be felt in earnest next year, when corporate bankruptcies and unemployment will continue to rise,”EBRD Chief Economist Erik Berglof said in a statement. “Growth over the medium term in the EBRD region is also likely to be below the trend experienced over the last decade,” he added.
Albania remains the only country in the Balkans which is expected to experience economic growth this year, at 3 per cent of GDP. However, the Albanian economy will slow further in 2010, registering 1.6 per cent growth. Croatia's economy is expected to contract by 5.4 per cent; Bosnia's by 3.1 per cent; Serbia's by 4 per cent; Macedonia's by 1.6 per cent; Montenegro's by 4.1 per cent; Bulgaria's by 6 per cent and Romania's economy by 8 per cent.
According to EBRD, Albania's edge lies in its international market competitiveness and a relatively sound pre-crisis banking system.
Factors restraining growth in 2010 include the subdued pace of export market recovery - particularly in the euro zone - and continuing tight credit conditions, as banks continue to gradually shrink their assets in the region, and as lending to households and small firms remains constrained by rising non-performing loans.
