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Economic Outlook for 2016
The Central and Eastern European Forum
Vienna, January 19, 2016
Bas B. Bakker
Senior Regional Resident Representative
for Central and Eastern Europe
Big picture—GDP growth:
CIS in recession; rest of CEE doing better
2
-6
-4
-2
0
2
4
6
8
10
2000 2003 2006 2009 2012 2015
CEE EU
CEE
CIS
3-year rolling average PPP weighted real GDP growth
(percent)
Big picture—Inflation:
High in CIS; low in rest of CEE
3
0
2
4
6
8
10
12
14
16
18
20
2000 2003 2006 2009 2012 2015
3-year rolling average CPI inflation
(percent)
CEE EU
CEE non-EU
CIS
Outside of CIS, most countries moderate
to fairly strong growth
4
GDP growth
(percent) 2015 2016
-10.0 - -5.0
-5.0 - 0.0
0.0 - 1.0
1.0 - 2.0
2.0 - 3.0
3.0 - 4.0
Note: Striped fill denotes CESEE country under IMF programs.
Risks for the Region
Hard landing in China
Prolonged recession in Russia
Disappointing Euro Area growth
Financial market volatility
Geopolitical tensions
5
And of course the Refugee Crisis
6
20
40
60
80
100
120
140
160
180
Jan
-14
Feb
-14
Mar-
14
Ap
r-14
May-1
4
Jun
-14
Jul-
14
Au
g-1
4
Sep
-14
Oct
-14
No
v-1
4
Dec-
14
Jan
-15
Feb
-15
Mar-
15
Ap
r-15
May-1
5
Jun
-15
Jul-
15
Au
g-1
5
Sep
-15
Germany
Hungary
Sweden
Italy Finland
Total EU
First-time asylum appilcations received by EU countries
(thousands of people)
Per capita GDP well above pre-crisis level
7 Greece Cyprus Ukraine Italy Croatia Slovenia Portugal Spain Russia France
Austria United Kingdom
Serbia Czech Rep.
Montenegro Hungary
Bosnia and Herz. Ireland
Germany Romania
Estonia Latvia
Bulgaria Slovakia
Lithuania Macedonia
Belarus Moldova
Poland Albania
-30 -20 -10 0 10 20 30
Real GDP per capita, 2015
(percent change since 2008)
Note: Selected EU15 countries in blue
But crisis legacies still to be addressed:
NPLs remain high…
8
Non-performing loans
(latest available data, percent of total loans)
0.0 - 5.0
5.0 - 10.0
10.0 - 15.0
15.0 - 20.0
20.0 - 25.0
25.0 - 100.0
Below 5 percent
5-10 percent
10-15 percent
15-20 percent
20-25 percent
Above 25 percent
Fiscal buffers have yet to be rebuilt
Loosening 2016 targets does not help!
9
0
1
2
3
4
5
6
7
8
Fall 2015 WEO
Fall 2014 WEO
Estimates of 2016 Fiscal Deficit by WEO vintage
(percent of GDP)
Estimates of 2016 deficit as in:
Longer term challenge: boosting productivity
and employment rate
10
20
30
40
50
60
70
80
90
10 30 50 70 90 110
Em
plo
ym
en
t ra
te (
perc
en
t)
Labor utilization and productivity, 2015
Labor productivity (PPP adjusted USD thousand)
Note: Bubble color reflect regional groupings. Bubble size reflect GDP per capita level (PPP adjusted)
*2014
MNE* UKV* SRB BIH
MDA
UKR
ALB MKD
BLR
SVK POL
HRV
RUS
BGR ROU
LAT
EST CZE
SVN LTU
HUN
NLD DEU
Thank you
Refugee crisis
12
0 - 2
2 - 4
4 - 6
6 - 8
8 +
Share of non-nationals in total population, 2013
Refugee crisis
13
below 0 percent
0 - 1
1 - 2
2 - 3
3 - 4
over 4 percent
below 0 percent
0 - 1
1 - 2
2 - 3
3 - 4
over 4 percent
Change in asylum applications as a share of total population,
Q1-Q3 2015 compared to Q1-Q3 2014
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