Moldova, Montenegro and Serbia to experience strongest CESEE economic growth in 2021
SOFIA (Bulgaria), July 8 (SeeNews) – Moldova, Montenegro and Serbia will show the strongest economic recovery after the pandemic among the countries of Central, Eastern and South-Eastern Europe (CESEE) in 2021, according to the Vienna Institute for International Economic Studies (WIIW) mentioned.
Moldova’s economy is expected to grow by 7%, Montenegro’s by 6.5% and Serbia’s by 6% in 2021, WIIW said in a press release for its summer economic forecast for CESEE on Wednesday. .
Among the other countries of South East Europe (SEE), the WIIW forecasts an economic growth of 5.3% for Kosovo, 5.2% for Romania, 5.1% for Croatia and 5% for the ‘Albania.
North Macedonia’s economic growth in 2021 is projected at 4.1%, while that of Slovenia is estimated at 4%.
The economies of Bulgaria and Bosnia and Herzegovina are expected to develop the least among the countries of South Eastern Europe. Bulgaria’s GDP will grow by 3%, while Bosnia and Herzegovina’s economy will grow by 2.9% this year, according to the think tank.
The CESEE’s economy is expected to grow by 4.2% overall in 2021, the WIIW said, revising its April forecast up to 3.8% for economic growth for the region.
Rising private consumption, business investment, foreign direct investment, along with the recovery in exports and rising employment will contribute the most to the region’s economic recovery in the second half of 2021, WIIW said.
“Despite the depressing health situation, in the first quarter the region performed much better than expected, indicating that economies have adjusted to the pandemic,” said Branimir Jovanovic, WIIW economist and lead author of the report, in the Press release.
Inflation will be higher than expected, forcing central banks to raise interest rates this year, the WIIW said, adding that the increases were mostly symbolic and are not expected to have significant effects on economic or credit activity.
Tourism will improve in 2021, although it does not reach pre-pandemic levels.
The WIIW has warned that a new wave of Covid-19 could slow economic recovery in the CESEE, but it is unlikely to have the same impact as previous waves. A second risk that could hold back the recovery is premature fiscal consolidation.