November 16 (SeeNews) - Croatia and Montenegro will post the strongest economic recovery from the coronavirus crisis among countries in Central, East and Southeast Europe (CESEE) in 2021, the Vienna Institute for International Economic Studies (WIIW) said.
"After an estimated contraction of 4.5% this year, the region should grow by 3.1% in 2021 and by 3.3% in 2022. The top performers in 2021 will be Croatia and Montenegro, while the recovery will be much more subdued in Bulgaria and Ukraine," WIIW said in an executive summary of its Autumn economic forecast for the region.
Most economies of CESEE withstood the first wave of the coronavirus pandemic better than Western Europe, due to the relatively small size of the service sector, which suffered the most from the pandemic, WIIW said.
"However, there were strong negative spill-overs from the effective closure of borders during the lockdowns and from the slump in the euro area. As a result, those CESEE economies that rely on tourism (Croatia and Montenegro) and foreign trade (the smaller Visegrad countries and Slovenia) were the worst affected during the first wave," WIIW noted.
Partly due to the policy stimuli enacted, CESEE economies rebounded strongly in the third quarter, with retail trade benefiting from purchases delayed during the lockdown, and international production chains largely resumed their operation, but the pre-crisis levels of economic activity have not been reached.
The risks to the forecasts are clearly on the downside. Any further spread of the virus would not only necessitate further lockdowns, with direct contractionary effects for the economies of the countries involved, but would also affect the demand for durable consumer and investment goods, due to the high level of uncertainty, WIIW said. "Besides, the pandemic – even if successfully contained – may leave a lasting legacy in the form of depressed demand for many services, such as aviation, hospitality and recreation, making businesses in those sectors dependent on continued government support. The need for such support will clearly increase in the event of renewed lockdowns."
Details on the real GDP growth forecasts (in %) of WIIW for Southeast Europe (SEE) countries follow:
|
2020 |
2021 |
Bulgaria |
-5.1 |
1.7 |
Croatia |
-9.4 |
5.0 |
Romania |
-5.5 |
3.7 |
Slovenia |
-6.7 |
4.5 |
Albania |
-6.4 |
4.6 |
Bosnia and Herzegovina |
-5.1 |
3.2 |
Montenegro |
-9.0 |
5.0 |
North Macedonia |
-6.0 |
4.5 |
Serbia |
-2.0 |
4.5 |
Kosovo |
-5.1 |
4.8 |
Moldova |
-7.0 |
4.0 |
The CESEE region includes 11 EU-member states, six Western Balkan countries, four members of the Commonwealth of Independent States, as well as Turkey and Ukraine.