Economic recovery in countries aspiring to join the European Union continued in the last quarter of 2010, even though its pace differed from country to country, with Croatia still registering negative GDP growth, according to a regular quarterly report of the European Commission.
While Turkey saw an unexpected growth at an annual rate of 3.6 percent in the last quarter of 2010, thanks to consumption and investment, which brought its annual 2010 growth to 8.9 percent, in the Western Balkans growth remained uneven, the EC said in its quarterly report on the economic situation in the EU candidate-countries and countries in the process of EU accession.
Croatia, the most severely hit by the crisis in the region, still registered negative GDP growth in 2010, the authors of the report say speaking of the situation in the EU candidate-countries.
In the fourth quarter of last year, Croatia's GDP dropped 0.6 percent from the same period of the previous year. At the annual level, Croatia's GDP shrank by 1.2 percent in 2010.
Serbia saw a moderate growth of 1.7 percent in the last quarter of 2010, while the Former Yugoslav Republic of Macedonia registered a GDP growth of 2.3 percent.
According to a number of indicators, growth was moderate also in Montenegro and Bosnia and Herzegovina, said the authors of the report, without providing concrete figures for the two countries.
Albania remains an outlier in the region, as the country weathered the crisis without a recession, and GDP grew by a further 5.7 percent in the last quarter of 2010.
In Iceland, while real GDP declined last year by 3.5 percent, fourth quarter data (0% growth year-on-year), however, suggest that the recession may progressively be coming to an end.
The report notes that net exports have been the main positive driving element of growth in Iceland and throughout the Western Balkans.
The current account deficits decreased in almost all countries, with the current account deficit in Croatia coming down to 1.5 percent of GDP, from 5.5 percent in 2009. In Bosnia and Herzegovina the current account deficit dropped to 5.3 percent in 2010 from 6.2 percent in 2009.
The situation is rather the opposite in Turkey, where strong domestic consumption and investment fuelled high imports growth and a widening of the trade deficit to 6.6 percent of GDP, compared with 2.3 percent in 2009, said the report.
Labour market developments also point to very dissimilar situations. In Turkey the unemployment rate, in tandem with high growth, declined further in the last quarter of 2010, down to 11 percent, three percentage points below its end-2009 peak.
Conversely, in Croatia and Iceland unemployment continued to rise in the fourth quarter of 2010, reaching 12.1 and 7.4 percent respectively.
Elsewhere a lag could, as expected, be observed between the overall improving economic situation and developments in the labour markets, where no material improvement could be noticed, except to some extent in Albania and the Former Yugoslav Republic of Macedonia, said the report.
