Crisis over for Eastern Europe, but growth will be slow: institute
(VIENNA) - Central and Eastern Europe have emerged from the economic crisis but steady growth will be slow to come and unemployment will remain high, the Vienna-based think tank wiiw said on Thursday.
After a deep recession in 2009, "most countries in the region have emerged from the trough of the crisis," the Vienna institute for international economic studies (wiiw) said in a report published on Thursday.
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 1.0 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, gross domestic product (GDP) was likely to shrink in Estonia, Latvia and Lithuania, by 1.5 percent, 4.5 percent and 3.0 percent respectively.
Wiiw meanwhile forecast 1.0 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 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 forecast average growth for the 10 new member states at 2.8 percent, followed by 3.6 percent in 2012.
EU candidate Turkey was to see 4.0-percent growth this year, 3.0 percent in 2011 and 5.0 percent in 2012.
Croatia meanwhile was expected to shrink by 1.0 percent this year, before posting growth of 2.0 and 2.5 percent in the next two years.
Wiiw also predicted massive 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 cross 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.