RIGA - International Monetary Fund chief Christine Lagarde on July 16 praised Eastern Europe for its “courage” in addressing economic crises since 2008, stressing that “the worst is most likely behind” it, reports AFP. “Five years after the start of the crisis the worst is most likely behind you, most countries have returned to positive growth,” Lagarde told Romanian bankers and journalists in Bucharest.
“We expect only two countries of the region to be in recession in 2013 - Croatia and Slovenia - compared to eight last year,” she added during a speech on ‘Eastern Europe and Romania: The Road Ahead.’
First quarter average growth in the region was positive. The top performers were Latvia, growing 1.4 percent and Lithuania 1.3 percent.
Meanwhile, the economy of the entire European Union shrank by 0.1 percent. Earlier this month, the IMF cut its global economic growth forecast, citing new downside risks in key emerging-market economies and a deeper recession in the eurozone.
The IMF projected that the global economy would grow 3.1 percent in 2013, down from its April estimate of 3.3 percent.
Lagarde urged Eastern European countries to continue macroeconomic stability efforts, fairly share the burden of adjustment and spur growth to fully capitalize on progress made since the collapse of communism.
“What has happened in this part of the world is setting standards about what can be done in other parts of the world” in terms of transition to a market economy, she said. The IMF head stressed that rigid labor markets, inefficient administration or unfinished transition processes, including the restitution of property, were “roadblocks” to improvement.
They have to be removed if the region were to “break down the barriers to more dynamic growth.”