IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper or follow this series

The Transition Economies: Externally Conditioned Improvements in 2000, Slowdowns and Adjustments Likely in 2001 and 2002

  • Leon Podkaminer

    ()

    (The Vienna Institute for International Economic Studies, wiiw)

For the first time since the transformation began, all transition economies recorded GDP growth in the year 2000. Some of the traditional 'losers' grew much faster than the traditional 'winners' of the transition process. The average growth rate in the region more than doubled and the differences in the rates of GDP change narrowed significantly. No currency, current account, or banking crises occurred and all countries managed to accommodate the shock of high oil prices. The highest growth rates were recorded in countries with a very low base, under exceptionally favourable external conditions. Strong growth in the EU contributed to the growth acceleration in most more advanced countries. Expansion of exports and imports did not yet generally reduce trade deficits and current account deficits are still a major problem for some countries, though the inflows of foreign capital have so far made their financing unproblematic. Growing industrial production was almost everywhere combined with some contraction in employment. Labour productivity improved, but rates of unemployment generally increased. The process of disinflation was perturbed by rising world market energy prices and hikes in rates of indirect taxation. With the coming slowdown of growth in the EU, the export sectors of the transition countries will come under pressure in 2001. On account of higher levels of technological development and the existing degree of integration into the world economy, the Hungarian, Slovenian - and to a lesser degree also the Czech and Slovak - industry will be in a better position to withstand the deterioration in the EU business climate. Nonetheless, the expected rate of GDP growth will drop to 3% on average in 2001. The expansion of trade (and current account) deficits will be moderated due to the stabilization of the world oil market. Weakening growth in the EU may have serious consequences particularly for Poland, Bulgaria, the Czech Republic and Romania. The recent tendencies in Poland indicate that the growth slowdown here may be more pronounced than elsewhere. Poland (and to a much lesser degree Bulgaria) seems more vulnerable to the negative effects of high current account deficits than other countries. Unless oil prices slump dramatically, the recovery in Russia will continue, though at a lower pace. The recovery in Russia will also be supporting growth in Ukraine. The prospects for 2002 are so far uncertain, though a moderate acceleration of GDP growth in the transition countries is likely. But much will depend on the degree of the growth slowdown in the EU and on the resultant adjustments in the transition countries. Whether or not growth accelerates in the EU remains to be seen; even if it is strong, the current uncertainties are likely to result in downscaling of investment activities (including greenfield foreign direct investment) in the transition countries.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.wiiw.ac.at/the-transition-economies-externally-conditioned-improvements-in-2000-slowdowns-and-adjustments-likely-in-2001-and-2002-p-199.html
File Function: Order URL / Description
Download Restriction: Only to order

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Paper provided by The Vienna Institute for International Economic Studies, wiiw in its series wiiw Research Reports with number 275.

as
in new window

Length: 93 pages including 22 Tables and 5 Figures
Date of creation: Feb 2001
Date of revision:
Publication status: Published as wiiw Research Report
Handle: RePEc:wii:rpaper:rr:275
Contact details of provider: Postal: Rahlgasse 3, A-1060 Vienna
Phone: (+43-1) 533 66 10
Fax: (+43-1) 533 66 10-50
Web page: http://www.wiiw.ac.atEmail:


More information through EDIRC

Order Information: Web: http://wiiw.ac.at

No references listed on IDEAS
You can help add them by filling out this form.

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:wii:rpaper:rr:275. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Customer service)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.