EBRD Sees SEE Economic Growth Accelerating to 6.5% in 2008, Slowing Down to 3.1% in 2009

"Growth in south-eastern Europe is seen rising to 6.5 per cent this year from 6.2 per cent in 2007 and then falling back to 3.1 per cent next year," it said in a statement presenting its Transition Report 2008 tracking the economic performance and progress on reforms across EBRD countries.

Growth in the region of EBRD operations is likely to fall sharply in 2009 in the face of global economic slowdown and financial market turbulence, the EBRD said and urged countries where it invests to place a high priority on the stabilisation of their banking systems.

The EBRD expects overall growth in EBRD countries would fall to 6.3% this year from 7.5% a year agro and drop further to 3.0% next year.

The region now faces a much less benign international environment and outflows of capital from emerging markets, risk aversion and the recession in key economies from the Organisation of Economic Cooperation and Development would test the resilience of transition countries, the bank's chief economist Erik Berglof was quoted in the statement as saying.

The rapid slowdown would mitigate threat of inflation and stabilisation of banking systems would become the key priority for governments across the region.