The economies of Balkan countries are recording high growth rates and are increasingly exposed to the risk of overheating, with a sharp rise in asset prices and trade deficits threatening economic stability, stated the international credit rating agency Standard & Poor’s in its latest report.
"This will require a wise response from politicians, especially due to the dwindling liquidity in global markets and the strengthening of political risks considering the start of the final phase of negotiations on the final status of Kosovo," emphasized S&P credit analyst Moritz Kraemer. A controlled slowdown in economic growth, supported by prudent political measures, would positively impact the prospects of the countries in the region for EU accession. Most of them aspire to become EU members by 2015, Kraemer highlights in the article "Return to the European Mainstream: The Dynamic Balkan Region Makes Up for Lost Time."
In a separate report titled "Frequently Asked Questions and Answers about Loans: Bulgaria, Romania, and Croatia Face Increasing Problems Due to Gradual Strengthening of External Vulnerability," Standard & Poor’s emphasizes that the risk of overheating in the economies of the mentioned three countries has significantly increased in recent years, despite the fact that the sharp rise in imports has restrained inflationary pressures, resulting in only moderate price growth. Since the balance of payments deficit has reached an unsustainable level in Bulgaria (local currency rating BBB+/stable/A-2) and Romania (foreign currency rating BBB-/stable/A-3) and to a lesser extent in Croatia (foreign currency rating BBB/stable/A-3), this economic valve, resistant to strong pressures, is unlikely to be able to contain the pressures towards overheating for much longer, and prices are expected to start rising significantly, predict S&P.
