From Double-Dip Recession to Fragile Recovery

World Bank

From Double-Dip Recession to Fragile Recovery

2013

World Bank

After the double-dip recession, as a group the six South East European countries (SEE6)- Albania, Bosnia and Herzegovina, Kosovo, FYR Macedonia, Montenegro, and Serbia-are now making a fragile recovery. Last year the recession in the Eurozone had adverse impact on external demand and Foreign Direct Investment (FDI) in SEE6 and the severe winter and a summer drought crippled agriculture and affected trade, energy, and economic activity overall. However, the recovery in SEE6 is still tentative. In some countries nonperforming loans, sluggish credit recovery, continued deleveraging, and fiscal consolidation are exerting a drag and recovery in SEE6 is unlikely to accelerate as long as the Eurozone remains in recession. The SEE6 region is projected to grow 1.7 percent in 2013, signaling the end of the 2012 double-dip recession. Even though growth will in general be fragile, it will be on the upswing in all six countries. Kosovo again is expected to have the highest growth (3.1 percent), thanks to major public investments and a significant inflow of remittances. Against the backdrop of this tentative and fragile recovery, SEE6 countries should, as argued in the last report, intensify their efforts to reform structural areas. Fiscal consolidation efforts should become easier now that the output and revenue outlook is improving. The investment climate needs to be improved substantially, especially in the main areas of weaknesses: construction permits and licenses, barriers to entrepreneurship, and skills and infrastructure. One of the main worries in this nascent recovery is that SEE6 economies are plagued by high unemployment, especially youth unemployment, and they are not creating jobs fast enough to absorb new entrants into the labor force. Emigration continues as the current environment for doing business exacerbates the difficult labor market conditions.

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AGROVOC Keywords

access to information accountability accounting bank deposits banks commercial banks corruption credit policies debt developing countries economic activities economic growth employment entrepreneur entrepreneurs entrepreneurship exchange rate external debt extreme poverty financial institutions financial market gender gender equality households housing illiteracy income distribution income tax indebtedness inflation interest rates international bank laws liquid assets liquidity living standards maturity migration private investment privatization productivity profitability public debt public policies remittances returns savings social security start-ups stocks taxation unemployment urban areas urban development wages

Bibliographic information

Publisher

Washington, DC

Other Subjects

Capital adequacy; Labor force participation; Banking sector assets; Financial capital; Employee; Export performance; Debt crisis; Asset ownership; International financial markets; Loan markets; Employment growth; Labor markets; Current account; T-bonds; Real exchange rates; Npl; Interest rates on loans; National bank; New entrants; Insurance protection; Receipts; Maturities; Expenditures; Private bank; Purchasing power; Foreign financing; Financial markets; Banking reform; Consolidation; Monetary fund; Cds; Debt instruments; New markets; Debts; Vulnerable groups; Tax credits; Ministries of finance; Central bank; Deposits; Government debt; Legal systems; Public debt instruments; Lending conditions; Credit growth; Finances; Fiscal deficit; Micro enterprises; Demand-side factors; Disabled; New businesses; Return; Economic climate; Trade balances; Export growth; Disbursements; Capital markets; Beneficiaries; Tax burden; Ethnic minorities; Welfare dependence; Employers; Institutional reforms; Bank of greece; Insurance agencies; Foreign exchange; External migration; Tax burdens; Inflation rates; Foreign direct investment; Banking sector; Long-term external debt; Demographic profiles; Income growth; Labor market; Tax system; Institutional barriers; Trading; Labor mobility; Regional banks; Loan-to-deposit ratios; Personal income; International financial institutions; Safety net; Job creation; Issuance; Credit ratings; National banks; Earnings; Current account deficits; Exchange rates; Liberalization of trade; Demographic factors; Inequality; Debt policies; Business startup; Purchasing power parity; Minimum wage; Capital adequacy ratios; Subsidiary; Stock markets; Foreign currency debt; Portfolios; Income levels; Domestic currencies; Formal workforce; International bonds; Policy design; Nonperforming loans; Federal reserve; Capital flows; Domestic banks; Home ownership; Limited access; Recession; Financial crisis; Self-employment; Labor costs; Human development; Factoring; Bank lending; Credit support; Recapitalization; Residential mortgages; Gender gaps; Domestic currency; Public finances; Deposit insurance; Monetary policy; Safety nets; Economic activity; Interest rate; Fiscal deficits; Impediments to business; State guarantees; Central banks; Market conditions; Productive investment; Access to jobs; International markets; Domestic debt; Investor confidence; Micro-data; Local currency; Investment plans; Emerging markets; Arrears; Loan; Employment opportunities; Sovereign debt; Job opportunities; Claimants; Central bank bills; Credit default swap; Return on equity; Host country; Portfolio; Informal workers; Credit default; Business entry; Market data; Economic opportunity; Public investments; Registration requirements; Group of firms; Macroeconomic stability; Foreign currency; Loan quality; Investment climate; Bond; Local economy; Financial sector reforms; Fiscal policy; Banking institutions; T-bills; Deposit; Political uncertainty; Local market; Short-term debt

License

South East Europe Regular Economic Report;No. 4http://creativecommons.org/licenses/by/3.0/igoWorld BankCC BY 3.0 IGO

Source

South East Europe Regular Economic Report;No. 4

In AGRIS since: 2014-09-15

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http://hdl.handle.net/10986/16559

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