South East Europe Six : From Double-Dip Recession to Accelerated Reforms
This note discusses the external environment, economic outlook, and key policy challenges for the six South East European Countries (SEE6)-Albania, Bosnia and Herzegovina (BIH), Kosovo, the former Yugoslav Republic (FYR) of Macedonia, Montenegro, a...
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| Format: | Brief |
| Language: | English en_US |
| Published: |
Washington, DC
2014
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| Online Access: | http://documents.worldbank.org/curated/en/2013/01/17193906/south-east-europe-six-double-dip-recession-accelerated-reforms http://hdl.handle.net/10986/17047 |
| Summary: | This note discusses the external
environment, economic outlook, and key policy challenges for
the six South East European Countries (SEE6)-Albania, Bosnia
and Herzegovina (BIH), Kosovo, the former Yugoslav Republic
(FYR) of Macedonia, Montenegro, and Serbia-as they seek to
reignite economic recovery. After two years of fragile
recovery from the global recession, as a group, SEE6
countries experienced a double-dip recession in 2012.
Deteriorating external conditions, the impact of the severe
winter on economic activity, and a continuing rise in
unemployment early in the year took a toll on consumption,
investments, and exports. The rise in unemployment continues
to threaten the social fabric. Credit recovery and fiscal
consolidation are under threat. Nonperforming loans
(NPLs)-thought to be stabilizing only a few months ago-are
again on the rise. As a result, both within and outside the
region, the environment has become much more difficult to
navigate, and the policy trade-offs necessary to stabilize
economies and reignite growth have become more difficult to
make. To overcome these challenges, SEE6 countries need more
intensive policy reform to reduce public debt and accelerate
structural reforms, especially in fiscal consolidation and
the financial sector, labor markets, and business
environment. Additional external financing from
International Financial Institutions (IFIs) for growth and
jobs could prove effective, but only if accompanied by
intensified fiscal and structural reforms. |
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