Monthly Report No. 3/2023

NEW Including Up-to-date Forecasts and Forecast Revisions of the Main Economic Indicators for CESEE for 2023-2025 Chart of the Month Very few firms have left Russia since its invasion of Ukraine by Vasily Astrov Opinion Corner Can Bitcoin become the next world currency? by Shahab Sharfaei A decade and a half has passed since Bitcoin burst onto the scene. The hopes of the early adopters were that it would be the next world currency – a hope that remains unfulfilled. Fifteen years and a host of scandals and financial bubbles later, the question remains can Bitcoin deliver on its initial promise? Revisiting the benefits of EU membership the case for the Western Balkans and Moldova by Javier Flórez Mendoza and Oliver Reiter Here we re-evaluate the possible economic effects that would arise from the Western Balkan countries plus Moldova joining the EU. Applying a standard model for trade policy analysis, we find increases in real GDP ranging from 0.2% (for Montenegro) to 1.3% (for North Macedonia). Estimated positive changes in exports range from 13% (for Albania) to 18% (for Montenegro). The EU countries would also see positive effects, though of a much smaller magnitude. The role of state aid as a driver of export performance in the EU by Chiara Castelli In response to the crises of 2007 and 2010, state aid to businesses in the EU was increased substantially, with an average of 16% of it directed towards R&D and innovation. We find evidence of public intervention having had a significant influence in promoting digital competitiveness, especially in terms of digital capital exports and particularly for relatively R&D-intensive industries. Our analysis shows that public intervention should favour a broader approach to supporting digital exports, as more specific state aid that targets R&D and innovation requires prior technological knowledge, if it is to be successful. Forecasts of main economic indicators for Central, East and Southeast Europe for 2023-2025 From now on, instead of charts with monthly and quarterly statistics, every second month we aim to publish up-to-date forecasts and forecast revisions of the main economic indicators for CESEE countries real GDP growth, consumer price index (CPI), unemployment rate, current account and fiscal balance. In addition to the existing January and July forecast updates, the additional new updates are scheduled for the March, May, October and December Monthly Report issues.