wiener institut für internationale wirtschaftsvergleiche the vienna institute for international...

Wiener Institut für Internationale Wirtschaftsvergleiche

The Vienna Institute for International Economic Studies

www.wiiw.ac.at

Wirtschaftskrise in Osteuropa

Michael Landesmann

wiiw

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wiiw Spring Seminar, 27 March 2009

Fragile Europe: the Path in and out of the Crisis – What Is to be Done?

Die Wirtschaftskrise in Osteuropa

Krise in ‘Emerging Markets’

Warum sich die Krise auf Osteuropa erstreckt hat?

Gibt es Differenzierungen?

Wirtschaftspolitische Moeglichkeiten

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Industrieproduktion, 2007-2009moving 3-month average, annual growth in %

-20

-15

-10

-5

0

5

10

15

Jan-07 Jul-07 Jan-08 Jul-08 Jan-09

CZ HU SK SI

-20

-15

-10

-5

0

5

10

15

Jan-07 Jul-07 Jan-08 Jul-08 Jan-09

PL BG RO

Source: wiiw Monthly Database.

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Exporte (goods), 2006-2009EUR-based, Jan 2006 = 100

80

100

120

140

160

180

200

220

Jan-06

Jul-06

Jan-07

Jul-07

Jan-08

Jul-08

Jan-09

CZ HU SK SI

80

100

120

140

160

180

200

220

Jan-06

Jul-06

Jan-07

Jul-07

Jan-08

Jul-08

Jan-09

PL BG RO


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Wechselkurse*, 2006-2010EUR per NCU, end of period, Jan 2006 = 100

*An increasing line indicates appreciation.


80

90

100

110

120

130

Jan-06 Jan-07 Jan-08 Jan-09

CZ HU PL SK RO

Mar-09 Jun-09 Mar-10

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88

90

92

94

96

98

100

102

104

106

108

110

112

114

116

88

90

92

94

96

98

100

102

104

106

108

110

112

114

116

2008:01 2008:04 2008:07 2008:10

SlovakiaCzech Rep.PolandHungaryRomania

2 J

an

ua

ry 2

00

8 =

10

0

(Nominal) exchange rate developments

against the Eur, 2 January – 14 November

2008

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Zinssatzentwicklungen, three-months inter-bank rates, 2

January – 14 November 2008

3.5

4.0

4.5

5.0

5.5

6.0

6.5

7.0

7.5

8.0

8.5

3.5

4.0

4.5

5.0

5.5

6.0

6.5

7.0

7.5

8.0

8.5

2008:01 2008:04 2008:07 2008:10

Lithuania BulgariaEstonia PolandEuro area Czech Rep.Slovakia

Pe

rce

nt

4

6

8

10

12

14

16

18

20

4

6

8

10

12

14

16

18

20

2008:01 2008:04 2008:07 2008:10

RomaniaHungaryLatviaEuro area

Pe

rce

nt

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1993-2000 2001-20072002-2008

0

2

4

6

8

10

12

EU

-27

EU

-15

Au

str

iaB

elg

ium

De

nm

ark

Fin

lan

dF

ran

ce

Ge

rma

ny

Ire

lan

dL

ux

em

bo

urg

Ne

the

rla

nd

sS

we

de

nU

nit

ed

Kin

gd

om

Gre

ec

eIt

aly

Po

rtu

ga

lS

pa

in

Bu

lga

ria

Cy

pru

sC

zec

h R

ep

ub

licE

sto

nia

Hu

ng

ary

La

tvia

Lit

hu

an

iaM

alt

aP

ola

nd

Ro

ma

nia

Slo

va

kia

Slo

ve

nia

1996-2001

Source: Eurostat.

Wachstum – BIP pro Kopf zu KKPannual averages 1996-2001 and 2002-2008, in per cent

0

2

4

6

8

10

12

EU

-27

EU

-15

Au

str

iaB

elg

ium

De

nm

ark

Fin

lan

dF

ran

ce

Ge

rma

ny

Ire

lan

dL

ux

em

bo

urg

Ne

the

rla

nd

sS

we

de

nU

nit

ed

Kin

gd

om

Gre

ec

eIt

aly

Po

rtu

ga

lS

pa

in

Bu

lga

ria

Cy

pru

sC

zec

h R

ep

ub

licE

sto

nia

Hu

ng

ary

La

tvia

Lit

hu

an

iaM

alt

aP

ola

nd

Ro

ma

nia

Slo

va

kia

Slo

ve

nia

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Arbeitslosigkeitsratenin %, annual average

05

10152025

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

BG RO EE LV LT

05

10152025

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

CZ HU PL SK SI

Source: wiiw Database incorporating national statistics, LFS.

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Budgetdefizite, 1998-2008in % of GDP

-14

-12

-10

-8

-6

-4

-2

0

2

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

CZ HU PL SK SI

Source: Eurostat.

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-10-8-6-4-202

Czech Republic Hungary Poland Slovak Republic Slovenia

1996 1997 1998 1999 2000 2001 20022003 2004 2005 2006 2007 2008

Leistungsbilanz in % of GDP, 1996-2008

-30

-20

-10

0

10

20

Estonia Latvia Lithuania Bulgaria Romania

1996 1997 1998 1999 2000 2001 20022003 2004 2005 2006 2007 2008

Source: wiiw Database incorporating national statistics.

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-24.0

-21.0

-18.0

-15.0

-12.0

-9.0

-6.0

-3.0

-30.0 -25.0 -20.0 -15.0 -10.0 -5.0

BulgariaRomania

LithuaniaEstonia

Latvia

Slovakia

Hungary

Poland

Slovenia

Czech R.

y

x

x: Current account in % of GDP, 2007 y: GDP growth in %, decline 2007-2009

BIP Wachstum und Leistungsbilanzdefizit

Source: wiiw Annual Database incorporating national statistics, Eurostat.

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Leistunsbilanzdefizit und CDS (Credit Default Swaps)

BULGARIACYPRUS CZECH REPUBLICESTONIA HUNGARYLATVIA

LITHUANIA

POLANDROMANIASLOVAK REPUBLIC SLOVENIA

BULGARIA

CYPRUS CZECH REPUBLIC

ESTONIA HUNGARY

LATVIA

LITHUANIA

POLAND

ROMANIA

SLOVAK REPUBLICSLOVENIA

BULGARIA

CZECH REPUBLIC

ESTONIA

HUNGARY

LATVIA

LITHUANIA

POLAND

ROMANIA

SLOVAK REPUBLIC

SLOVENIA

0200

400

600

800

5 Y

ear

Cre

dit

Defa

ult

Sw

ap o

n G

ov

Bond

-30 -20 -10 0Current Account over GDP

29/12/2006 31/12/2007 17/11/2008

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Unterschiede zwischen fixen und flexiblen

Wechselkursregimen – large capital inflows and

extension of external balance sheetsNet captial inflows

(surplus on the capital account and financial account of the BOP without reserves, % of GDP)

0

5

10

15

20

25

30

NMS-9 Fixers(Baltics+BG)

Floaters

2000 2007 I-III 2008

Gross external debtin % of GDP

0

20

40

60

80

100

120

NMS-9 Fixers(Baltics+BG)

Floaters

2002 2008

Source: wiiw Database incorporating national statistics, Eurostat.

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Hohe Leistungsbilanzdefizite in Laendern mit fixen

Wechselkursregimen - balance on current account (in % of GDP)

-30

-25

-20

-15

-10

-5

0

2002 2003 2004 2005 2006 2007 2008

BG EE LV LT

-30

-25

-20

-15

-10

-5

0

2002 2003 2004 2005 2006 2007 2008

CZ HU PL RO SK

Source: wiiw Database incorporating national statistics, Eurostat.

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0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2002 2003 2004 2005 2006 2007 H1-08

Bulgaria

Estonia

Latvia

Lithuania

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2002 2003 2004 2005 2006 2007 H1-08

Czech RepublicHungaryPolandSlovakiaRomania

Kreditwachstum des privaten SektorsDomestic credit growth (in % of GDP)

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Ukraine - Wachstumsraten, 2004-2008quarterly, year-on-year change in %

-15

-12

-9

-6

-3

0

3

6

9

12

15

I.Q

u.0

4

II.Q

u.0

4

III.

Qu

.04

IV.Q

u.0

4

I.Q

u.0

5

II.Q

u.0

5

III.

Qu

.05

IV.Q

u.0

5

I.Q

u.0

6

II.Q

u.0

6

III.

Qu

.06

IV.Q

u.0

6

I.Q

u.0

7

II.Q

u.0

7

III.

Qu

.07

IV.Q

u.0

7

I.Q

u.0

8

II.Q

u.0

8

III.

Qu

.08

IV.Q

u.0

8

Source: wiiw Database incorporating national statistics.

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Stahlpreis und Industrieproduktion

0

50

100

150

200

250

300

350

Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09

-40.0

-30.0

-20.0

-10.0

0.0

10.0

20.0

30.0

Global CRU Steel Price Index (Apr. 94=100)

Gross industrial production, real annual growth rate in % (right scale)

Source: wiiw Monthly Database incorporating national statistics and CRU steel price index.

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Welche Krise?

Contagion, capital accounts crisis, devaluations

Laenge der Krise?

Laenger-fristige Auswirkungen?

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Der Weg aus der Krise – was sollte gemacht werden?

Policy reactions and policy challenges:

same challenges as in more advanced economies (but often in worse

circumstances):

stabilize financial system; adjust to new capital accounts situation;

avoid exchange rate over-shooting; attempt anti-cyclical fiscal

measures; intensify labour market policies

Policy support from outside (EU, EU partners, IFIs) is vital!

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Anti-crisis policies Budget deficit/GDP on the rise due to lower revenues and rigid expenditures, more

expensive deficit financing

Limited scope for fiscal stimulus

- Modest demand stimulation: Slovakia, Slovenia, Czech Republic

- Neutral fiscal policy, but expenditure shifts to SMEs, public investments: Bulgaria, Poland, Romania

- Pro-cyclical policy, but revenues and expenditures shift: Baltics, Hungary

Monetary policy: limited expansion (lower policy rate, lower reserve ratio)

Differences by exchange rate regimes

- Eurozone: Slovenia, Slovakia – competitiveness problem

- Fixed in Baltics, Bulgaria – adjustment through cost reduction; managed devaluation?

- Flexible in the Czech R., Poland, Romania, Hungary – adjustment also by depreciation

Intention to join Eurozone soon to gain stability: Poland, Hungary, Bulgaria, Romania

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Longer-term outlook

2010, 2011 recovery depends on global (European) prospects

External financing, especially loans remain scarce and expensive

Need for domestic savings to finance investments

EU transfers increase, more in 2010 and beyond

FDI inflows shrink to half

Cost competitiveness may attract relocation

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Documents

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fragile europe

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gdp source