The 2002 Economic Survey of Europe, released by the United Nations Economic Commission for Europe (UNECE) on 2 May, confirms that the candidates for EU membership have escaped the global slowdown.
The UNECE Economic Survey of Europe states that the transition economies have avoided major contagion despite the global economic slowdown and market turbulence. Many of them even attracted more capital and received higher international credit ratings in 2001. Almost all of them posted positive rates of GDP growth and in some countries these were higher than in 2000, according to UNECE. The transition economies’ aggregate GDP increased by 5 per cent, making them one of the fastest growing regions in the world.
The report says this is due to continuing structural reforms, including privatisation, some strengthening of official reserves, upgrades in international credit ratings and the willingness of investors to differentiate among countries. In addition, the approach of EU accession has helped to bolster foreign investors’ interest in the candidates for EU membership.
Net financial flows to Eastern Europe rose in 2001 to 28 billion dollars (around 30.5 billion euro). The bulk of capital imports has been used for economic restructuring, and there has been only a moderate increase in foreign debt. Overall the financial account of the transition economies is estimated to have moved from a small deficit in 2000 to a small surplus in 2001.
Only Poland and Macedonia have recently encountered serious economic difficulties, states UNECE. After nine years of uninterrupted and rapid expansion, the Polish economy came to a near standstill in 2001. “Some of the current problems in Poland stem from the reluctance by the authorities to undertake important but unpopular reforms during the boom period, when the excellent macroeconomic performance tended to mask some chronic economic problems,” states the report. Macedonia was the only transition economy with falling GDP in 2001 due to the widespread disruption caused by the internal military conflict.
UNECE forecasts moderate growth in the transition economies in 2002: around 5 per cent in the Commonwealth of Independent States (CIS), 4 percent in the Baltic states, and 2.75 per cent in Central Europe. Despite a certain slowdown, the CIS is likely to remain the fastest growing region in Eastern Europe in 2002: 5-8 percent GDP growth is expected in the majority of these countries.