Emerging Europe excludes Baltics

TALLINN - Central and Eastern Europe seem to have emerged from the economic crisis but steady growth will be slow to come and unemployment will remain high, says Vienna-based think tank WIIW, reports news agency AFP. After a deep recession in 2009, “most countries in the region have emerged from the trough of the crisis,” said the Vienna Institute for International Economic Studies (WIIW) in a report.

Poland was the only country in the region to post growth in 2009 and it was expected again this year to boost the 10 new EU members’ average, forecast at 1 percent after a negative 3.6 percent last year. But individual figures were less positive: while Hungary, Bulgaria and Romania were expected to post zero-growth in 2010, GDP was likely to shrink in Estonia, Latvia and Lithuania, by 1.5 percent, 4.5 percent and 3 percent respectively.  WIIW meanwhile has forecast 1 percent growth for Czech Republic, Slovakia and Slovenia and 2.5 percent for Poland. “We expect all countries in the region to be growing again [but] only by 2011,” the institute said. “That growth may accelerate slightly in 2012, but will in general be slower than in the pre-crisis period,” it added.

For next year, WIIW forecasts average growth for the 10 new member states at 2.8 percent, followed by 3.6 percent in 2012. WIIW also predicted substantial growth for non-EU members Kazakhstan, Russia and Ukraine starting this year.
A prerequisite for growth, however, was a global recovery, prompting increased imports to the region, since rising unemployment would curb private consumption, the institute insisted. The jobless rate was also expected to peak this year, before falling slowly in the years to come. A further danger was the effect of Greece’s current problems on the region’s eurozone prospects, the institute said. “That may well [affect] the plans of the new member states that have based their medium-term economic strategy on the earliest possible adoption of the euro,” it noted.