As Bulgaria, Croatia, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, the Slovak Republic and Slovenia - the eleven countries making up the European Union 11 (EU11) region - exit recession and begin building on the limited growth seen in 2013, these countries are also beginning to take a deeper look at how economic growth can better benefit all people in the region, especially the bottom 40%.
Although the year got off to a slow start in the region - with GDP growth of only 0.2 percent in the first quarter of 2013 - growth started picking up in the second quarter, reaching 0.8 percent for the first nine months of 2013. Rising net export growth, especially in Romania, Slovakia, and Poland, helped boost the economic outlook in the region, with growth now expected to be 1% in 2013 and 2.3% by the end of 2014. Despite this projected recovery, unemployment rates in the region remain near record–high levels - highlighting the work that still needs to be done in order to truly set these countries on the path toward economic recovery.
In an effort to bolster this growth and ensure that the resulting economic prosperity can have a positive impact on all segments of society, experts in the region continue to work with the World Bank to identify policies and actions geared toward achieving these outcomes. As part of this work, the latest EU11 Regular Economic Report (EU11 RER) identifies the drivers of this growth and outlines focus areas that can further inclusive growth and prosperity in the region. A combination of analyses and recommendations, this report looks at the growth happening in the region and offers policy recommendations that are beneficial at the regional and country levels alike.
“Now that these countries have exited recession, it is a sign of growth to come,” says Ken Simler, Senior Economist at the World Bank and co-author of the report, “the economies are more stable and the fundamentals are in place for accelerated growth going forward.”
This growth, however, will not be homogenous. Economic growth in Latvia, for example, is expected to reach 4.2% in 2014, while Slovenia is expected to experience a contraction of 1% during the same period. Additionally, the drivers behind this growth and contraction are equally varied. Strong levels of domestic consumption have fuelled the economies of Estonia, Latvia, and Lithuania, while robust exports – primarily in the automotive industry – have buoyed Romania’s economy. The Czech Republic, Slovenia, and Croatia, however, all experienced declines in domestic demand during most of 2013.