Sun, Nov 22 2009

World Bank forecast 3% recession for EU's former planned economies

Fri, May 22 2009 16:30 CET byAlex Bivol 1434 Views 2 Comments
World Bank forecast 3% recession for EU's former planned economies

World Bank president Robert Zoellick.

The economies of 10 European Union countries from the former Communist bloc would shrink by three per cent this year and stagnate around zero per cent next year, the World Bank said in a report on May 22.

Hit by the recession in high-income countries, the main destination of the region's exports, and reduced capital inflows, the 10 Eastern European member states of the EU were experiencing "a sharp downturn and steep rise in unemployment because of the region’s deep trade, capital and labor market integration with the EU and the world economy," the bank said.

The 10 countries - Bulgaria, the Czech Republic, Estonia, Latvia, Lithuania, Hungary, Poland, Slovakia, Slovenia and Romania - had avoided financial meltdown, but faced uncertain prospects for growth and convergence with the rest of the EU.

Still, the initial shock was over, the World Bank said, as "the rate of contraction is expected to moderate from the second quarter onwards, and growth could move into positive territory towards the end of 2009."

The report highlighted some of the differences within the region, but did not give individual forecasts for each country.

Comments

Anonymous Ilian Fri, May 22 2009 21:51 CET
Inappropriate comment?

It is never in the interest of the nation or the populace to devalue its currency. This is the same absurd thinking that govt deficit spending will revive an economy. The argument that it will help the export sector, while true, is only one piece of the puzzle.

A nation's economic strength is closely linked to how strong it's currency is. You can't have a strong economy with a weak currency. More purchasing power for the domestic populace is a good thing, not bad.

Anonymous W. Acre Fri, May 22 2009 21:02 CET
Inappropriate comment?

These countries should devalue their currencies. The peg to the Euro only benefits corrupt politicians and multi-national corporations. It harms the population as a whole.

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