The economic crisis in new Europe has hit bottom, stated the head of the European Bank for Reconstruction and Development (EBRD), signaling that the bank’s updated forecasts will indicate improvement for the first time since most economies in the region began sliding back into recession.
EBRD President Suma Chakrabarti noted that since around 2011, the economic forecasts published by the EBRD every three months have regularly pointed to a deterioration in economic conditions. This is expected to change, he emphasizes in the announcement of updated forecasts that the bank will publish next week.
“We believe that such a situation has hit bottom and that we are back on an upward trajectory. It will be mild, meaning growth will not be strong, and it will vary from country to country. However, we hold that in 2013 and 2014 we will again be on a growth curve,” Chakrabarti conveyed in an interview with Reuters on Tuesday at a conference in Vienna.
He also praised the budget consolidation measures being undertaken by governments across the region, deeming them heroic, and stated that the unpopular austerity measures are the only path countries can take if they wish to avoid being penalized by investors.
At the EBRD, they continue to express concern regarding the deleveraging being carried out mostly by Western European banks, which own the largest part of the lending sector from the Baltics to the Balkans, noting that this process does not worry them as much as in previous years.
“This is not a trivial issue, but it is not as significant as it was in 2011,” he said.
