January 21 (SeeNews) - The European Bank for Reconstruction and Development (EBRD) said on Tuesday recovery in the Southeast European (SEE) region will continue in 2014 but growth rates will remain modest overall, at an average of just 2.1%, compared to 2.0% in 2013, as domestic demand remains weak and foreign direct investments to the region continue to lag well behind pre-crisis levels.
The SEE region comprises Albania, Bosnia, Bulgaria, Macedonia, Kosovo, Montenegro, Romania and Serbia.
“Several countries in the region face big fiscal challenges, as the combination of weak growth and the failure to rein in public expenditure has led to rising fiscal deficits and public debt levels,” the EBRD said in its latest Regional Economics Prospects report.
All SEE countries that were in recession in 2012 - Bosnia, Macedonia, Montenegro and Serbia - recorded positive growth in 2013, while growth in Romania is estimated to have accelerated to 2.5%. As a result, average growth in the region picked up markedly, from 0.4% in 2012 to an estimated 2.0% in 2013.
Stronger export performance and a better harvest have been important drivers of recovery in these economies. However, unemployment remains high across the region.
Growth in Turkey is seen at 3.3% in 2014, down from 3.7% in 2013, reflecting monetary tightening and an increase in financing costs linked to higher political risks which are pulling growth back. Nevertheless, domestic demand is still expected to grow, albeit at a slower pace, and net exports may benefit from a recent depreciation of the currency.
Following are real GDP growth figures from the EBRD report (in percent):
|
2013 (current forecast) |
2014 (current forecast) |
2013 (Oct 2013 forecast) |
2014 (Oct 2013 forecast) |
Croatia |
-0.7 |
1.0 |
-0.8 |
1.5 |
Slovenia |
-1.7 |
-2.0 |
-2.4 |
-2.5 |
Albania |
1.5 |
1.7 |
1.2 |
2.0 |
Bosnia and Herzegovina |
0.8 |
1.8 |
0.1 |
1.8 |
Bulgaria |
0.7 |
1.8 |
0.4 |
2.0 |
Macedonia |
3.0 |
3.0 |
2.4 |
2.7 |
Kosovo |
2.5 |
3.5 |
2.5 |
3.5 |
Montenegro |
1.5 |
2.0 |
1.5 |
2.0 |
Romania |
2.5 |
2.4 |
2.2 |
2.4 |
Serbia |
2.2 |
1.3 |
1.4 |
1.7 |
Moldova |
8.0 |
3.5 |
3.5 |
3.5 |
Turkey |
3.7 |
3.3 |
3.7 |
3.6 |
A recovery in all the regions where the EBRD invests is expected to be slow this year, despite improvements in the world’s most advanced economies, including the U.S. and the Eurozone.