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The Impact Of The Global Crisis On Transition Economies

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  • D. Mario Nuti

Abstract

All forecasts for transition countries – the 29 EBRD countries of operation – since mid-2008 have been repeatedly downgraded. The latest forecasts (May 2009) envisage an average income decline of 5 per cent in 2009 and only a small recovery of 1.4 per cent in 2010; performance is very diverse.In general, transition countries faced two shocks: a sudden stop and reversal of capital inflows, and an exports collapse due to the global slump. More specific factors include: 1) Home made sub-primes (domestic loans to households, enterprises and governments originally denominated in foreign currency); 2) External imbalances; 3) Worsening terms of trade for primary products exporters; 4) Fall or reversal of FDI and portfolio investment inflows; 5) Funds withdrawal by foreign banks; 6) External demand reduction; 7) Differences in initial positions and policy response. Earlier membership of the Euro by the new member states through a relaxation of Maastricht rules might have been beneficial, but the current crsis is no time for changing or bending rules. By comparison with the transition recession of the 1990s, the current recession is much smaller and shorter, it benefits from more generous assistance from the international community, and from the more enlightened fiscal and monetary policies now uncharacteristically recommended by International Financial Organisations.

Suggested Citation

  • D. Mario Nuti, 2009. "The Impact Of The Global Crisis On Transition Economies," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 54(181), pages 7-20, April – J.
    • Handle: RePEc:beo:journl:v:54:y:2009:i:181:p:7-20
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    Cited by:

    1. Nikola RADIVOJEVIĆ & Luka FILIPOVI & Тomislav D. BRZAKOVIĆ, 2020. "A New Semiparametric Mirrored Historical Simulation Value-At-Risk Model," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(1), pages 5-21, March.
    2. Ritsa Panagiotou, 2012. "The Impact of the Economic Crisis on the Western Balkans and their EU Accession Prospects," EUI-RSCAS Working Papers 64, European University Institute (EUI), Robert Schuman Centre of Advanced Studies (RSCAS).
    3. Khurshid Djalilov & Jens Hölscher, 2016. "Comparative Analyses Of The Banking Environment In Transition Countries," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 61(208), pages 7-26, January -.
    4. Panagiotou, Ritsa & Tzifakis, Nikolaos, 2022. "Deciphering the Greek economic diplomacy towards the Western Balkans: actors, processes, challenges," LSE Research Online Documents on Economics 114288, London School of Economics and Political Science, LSE Library.
    5. Ritsa Panagiotou & Nikolaos Tzifakis, 2022. "Deciphering the Greek Economic Diplomacy towards the Western Balkans: actors, processes, challenges," GreeSE – Hellenic Observatory Papers on Greece and Southeast Europe 169, Hellenic Observatory, LSE.
    6. Ivan Stosic & Dejan Eric, 2012. "Challenges And Perspectives Of Implementation Structural Changes In The Serbian Economy," Book Chapters, in: João Sousa Andrade & Marta C. N. Simões & Ivan Stosic & Dejan Eric & Hasan Hanic (ed.), Managing Structural Changes - Trends and Requirements, edition 1, volume 1, chapter 2, pages 25-43, Institute of Economic Sciences.
    7. Mirella Damiani & Milica Uvalic, 2014. "Industrial Development in the EU: What Lessons for the Future Member States?," Croatian Economic Survey, The Institute of Economics, Zagreb, vol. 16(1), pages 5-48, April.
    8. Goran Andjelic & Ivana Milosev & Vladimir Djakovic, 2010. "Extreme Value Theory In Emerging Markets," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 55(185), pages 63-106, April - J.
    9. Božidar Cerovic & Aleksandra Nojkovic, 2009. "Transition And Growth: What Was Taught And What Happened," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 54(183), pages 7-31, October -.
    10. Predrag Bjelić & Danijela Jaćimović & Ivan Tašić, 2013. "Effects Of The World Economic Crisis On Exports In The Ceec: Focus On The Western Balkans," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 58(196), pages 71-98, January –.
    11. Giovanni Andrea Cornia & Milica Uvalic, 2012. "Learning from the past: Which of the past/current development strategies are best suited to deal with the ‘quadruple crisis’?," Working Papers 116, United Nations, Department of Economics and Social Affairs.

    More about this item

    Keywords

    global crisis; transition economies; international financial organisations;
    All these keywords.

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems
    • P27 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Performance and Prospects
    • P52 - Political Economy and Comparative Economic Systems - - Comparative Economic Systems - - - Comparative Studies of Particular Economies

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