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Wednesday, 27.11.2024, 09:28
Wifo: Baltic countries will experience the deepest and longest recession of the European emerging economies
All European emerging markets except the Baltic trio of Estonia, Latvia and Lithuania will return to growth by 2011, with most of the economies already expanding next year, the Vienna-based Wifo said in an e-mailed report. The forecast assumes an improving global investor climate and doesn’t account for contagion effects from a possible exchange-rate crisis, writes Bloomberg/LETA.
"In most countries covered in this report, the GDP decline will have bottomed out over the second half of 2009," Wifo said. "A pronounced recovery, however, is not thought to set in before 2011."
Most of the region's economies, which grew at a faster pace than more-developed counterparts over the past decade, are now contracting as the first global recession since World War II curbs demand for exports and shuts off investment and credit.
Poland is the only European emerging economy that may stave off an annual economic contraction this year, growing at a forecast 0.8% in 2009, 1.5% in 2010 and 3% in 2011, Wifo said.
The economies of Bulgaria, Croatia, the Czech Republic, Kazakhstan, Macedonia, Romania and Russia, along with Slovakia, Slovenia, Turkey and Ukraine, may no longer shrink next year.
Hungary, which was the first European Union member to obtained a bailout last year during the credit crisis, will see its economy contract 1.5% in 2010 after shrinking 6.5% this year. The country may return to 3% growth in 2011, Wifo said. The Bosnian and Montenegran economies may also contract this year and in 2010.
The Baltic countries will experience the deepest and longest recession of the European emerging economies, with all three countries' economies expected shrink at least 10% in 2010, according to Wifo.
Estonia and Lithuania’s economies will shrink 16% in 2009, while Latvia’s gross domestic product will contract 20%. Estonia and Latvia’s economies will decline 2% in 2011, while Latvia’s may shrink 3%.
Russia may recover the fastest, with growth of four% next year after a contraction of 4.7% this year. Ukraine’s economy may grow 1.5% next year and 4.5% in 2011, after a contraction of 11% this year, Wifo said.