2014年-世界发展银行全球_South_East_Europe_Regular_Economic_Report_No_6___Brittle_recovery_70页_1mb

Summary of the South East Europe Regular Economic Report No. 6 (May 2014)

Core Content

This report provides an analysis of economic developments, prospects, and policies in six South Eastern European countries (SEE6): Albania, Bosnia and Herzegovina, Kosovo, FYR Macedonia, Montenegro, and Serbia. It highlights the region's fragile economic recovery and the challenges in translating this into sustainable job creation and fiscal stability.

Main Views and Key Information

I. Recent Developments

Exit from Recession

• The SEE6 region exited recession in 2013, with an average real GDP growth of 2.2%.
• Growth was driven by external demand, particularly from the European Union (EU), and improved global economic conditions.
• All six countries recorded positive growth, with Kosovo, FYR Macedonia, and Montenegro achieving growth rates of 3% or more.
• Serbia and Albania saw slower growth, with Serbia recording a 0.4% increase in GDP in 2013.

Export-led Growth

• Exports were the main driver of recovery, with total exports in the region growing by 16.8% in 2013.
• Serbia had the highest export growth at 25.6%, led by foreign companies like FIAT and Gazprom.
• Exports to the EU increased significantly, especially in Bosnia and Herzegovina, FYR Macedonia, and Serbia.
• The export composition was dominated by manufactured goods and machinery, with Serbia leading in machinery and transport equipment exports.

Persistent Challenges: Addressing High Unemployment

• Domestic demand remained weak due to high unemployment and limited credit recovery.
• Unemployment averaged 24.2% in 2013, with youth and low-skilled workers disproportionately affected.
• Employment increased in FYR Macedonia and Montenegro, but declined in Serbia and Albania.
• The decline in remittances, especially from Albania, further dampened domestic demand.

Fiscal Pressures Not Abating

• Fiscal deficits decreased slightly to 3.8% of GDP in 2013 from 4.3% in 2012.
• Revenue declined by 0.5% of GDP due to weak growth and deflationary pressures.
• Spending fell by 1% of GDP, helping to offset the revenue loss.
• Public debt and guarantees remained high, with some countries exceeding 60% of GDP.

Falling and Low Inflation

• Inflation in the region was low, averaging 1.2% in 2013.
• Central banks in Albania, FYR Macedonia, and Serbia eased monetary policy by cutting interest rates.
• Inflationary pressures were minimal, with food and energy prices remaining subdued.

Stable, Albeit Fragile, Financial Sector

• The financial sector remained stable but faced challenges, particularly with non-performing loans (NPLs).
• NPLs rose to an average of 16% in 2013, up from 5% in 2008.
• Countries like Albania, Montenegro, and Serbia had NPLs above the regional average.
• Credit growth slowed due to tighter underwriting standards and banks' efforts to clean balance sheets.

II. Prospects

• The region is projected to grow at 1.9% in 2014 and 2.6% in 2015, driven by external demand.
• Growth is expected to be uneven, with Serbia growing the slowest and Kosovo the fastest.
• Fiscal consolidation is likely to continue, especially in Serbia, which may face significant fiscal adjustments.
• The report emphasizes the importance of "smart" fiscal consolidation, including reducing public sector wages, improving social transfers, and maintaining productive spending.
• Monetary policy can be eased further in countries with pegged currencies, but caution is needed in flexible exchange rate regimes.
• Addressing NPLs and restoring credit growth is critical for supporting entrepreneurship and job creation.
• Downside risks include deflation in the Euro Area, rising global interest rates, and geopolitical tensions (e.g., Russia-Ukraine conflict).
• Domestic risks include socio-political tensions, slow SOE restructuring, and elections.
• The impact of recent floods on Bosnia and Herzegovina and Serbia could further slow recovery.

III. Spotlights

Spotlight 1: Youth (Un)employment in the Western Balkans

• Youth unemployment remains a significant challenge in the region.
• It is particularly high among vulnerable groups and is not expected to decline significantly in the short term.
• The report highlights the need for targeted policies to address youth unemployment and improve skills.

Spotlight 2: SEE6 Non-performing Loans: Effects, Obstacles to Resolving and Reforms

• NPLs have tripled over the past five years, reaching an average of 16% in 2013.
• The rise in NPLs is attributed to declining productivity, rising real wages, and banks' efforts to reduce risk.
• Reforms are needed to improve loan recovery, strengthen banking systems, and promote credit growth.

Key Indicators and Data

• GDP Growth: SEE6 averaged 2.2% in 2013, with Serbia and Kosovo leading.
• Export Growth: Serbia had the highest growth at 25.6%, followed by Albania (13.4%).
• Unemployment: Average rate was 24.2% in 2013, with high rates among youth and low-skilled workers.
• Fiscal Deficits: Reduced to 3.8% of GDP in 2013.
• Public Debt: Reached 50.1% of GDP in 2013, with some countries exceeding 60%.
• Inflation: Averaged 1.2% in 2013, with food and energy prices remaining low.
• Non-performing Loans (NPLs): Increased to 16% in 2013, with Albania, Montenegro, and Serbia above the regional average.

Conclusion

The recovery in South East Europe is export-driven but faces significant challenges in translating this into domestic demand and job creation. Structural issues such as high public wages, poor targeting of social benefits, and a narrow export base threaten long-term growth and convergence. Addressing NPLs and improving the financial sector's resilience are critical for sustained economic development. The region's prospects depend on continued external demand and effective domestic reforms. However, downside risks, including deflation in the Euro Area and domestic socio-political instability, could undermine this fragile recovery.