European Economy. Enlargement Papers
Economic Forecasts for the Candidate Countries, Spring 2002(254 kB)
(European Economy. Enlargement Papers. 09. April 2002.
Brussels. 53pp. Tab. Ann. )
KC-AA-02-003-EN-C ISSN: 1608-9022
As a result of the worsened international economic climate, economic growth slowed down in the candidate countries at the end of 2001. Nevertheless, due to strong domestic demand, most candidate countries showed resilience and the extent of the slowdown remained limited, in line with our Autumn 2001 forecast.
The weak economic development in the second half of 2001 weighs heavily on the average growth rate in the current year, despite the accelerating recovery. An expected return to normal external and domestic developments should make it possible to reach 4% average growth in 2003.
Lower international commodity prices have contributed to an inflation reduction in 2001. The expected further slowdown of average inflation over the forecasting period is mainly the result of policy efforts to reduce inflation in the high-inflation countries Romania and Turkey.
Continued enterprise restructuring and higher productivity growth resulted in net employment losses and a higher unemployment rate in 2001. Over the forecasting period, employment losses should be progressively compensated by higher employment creation and should lead to a slightly improved overall labour market situation in 2003.
Despite weaker demand for exports and strong domestic demand, external deficits declined slightly in 2001, due to more favourable terms of trade. The acceleration of export demand in 2002 and 2003 should prevent a significant deterioration of external balances, even with strong domestic demand.
General government deficits remain relatively high as the combined result of lower growth and counter-cyclical fiscal policies in some countries in the early years, and high transition-related expenditures over the whole forecasting period.