Riding the global growth wave Richard Grieveson Overview 1. Global - - PowerPoint PPT Presentation

▶
riding the global growth wave richard grieveson overview
SMART_READER_LITE
LIVE PREVIEW

Riding the global growth wave Richard Grieveson Overview 1. Global - - PowerPoint PPT Presentation

Feb 15, 2024 131 likes •348 views

Wiener Institut fr The Vienna Institute for wiiw.ac.at Internationale International Economic Wirtschaftsvergleiche Studies Press conference, 13 March 2018 New wiiw forecast for Central, East and Southeast Europe, 2018-2020 Riding the

slide-1
SLIDE 1

Wiener Institut für Internationale Wirtschaftsvergleiche The Vienna Institute for International Economic Studies

wiiw.ac.at

Riding the global growth wave Richard Grieveson

Press conference, 13 March 2018 New wiiw forecast for Central, East and Southeast Europe, 2018-2020

slide-2
SLIDE 2

2

  • 1. Global backdrop, drivers of growth in CESEE, forecasts 2018-20.
  • 2. Is the region overheating?
  • 3. Where are the risks to growth?
  • 4. Long-term convergence: can CESEE break out of the semi-periphery

trap?

Overview

slide-3
SLIDE 3

3

Source: Ifo.

German Ifo business climate index, 2005=100

Global conditions: best coordinated upswing for almost a decade

80 85 90 95 100 105 110 115 120 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

slide-4
SLIDE 4

4

Source: wiiw Annual Database incorporating national and Eurostat statistics, own calculation.

Quarterly real GDP growth, change in % against preceding year

CESEE: 2017 the best year since 2011, first time all 22 economies grew since 2007

  • 15
  • 10
  • 5

5 10 15

  • 6
  • 4
  • 2

2 4 6 1Q 113Q 11 1Q 123Q 12 1Q 133Q 13 1Q 143Q 14 1Q 153Q 15 1Q 163Q 16 1Q 173Q 17 4Q 17

  • 15
  • 10
  • 5

5 10 15

  • 6
  • 4
  • 2

2 4 6 1Q 113Q 11 1Q 123Q 12 1Q 133Q 13 1Q 143Q 14 1Q 153Q 15 1Q 163Q 16 1Q 173Q 17 4Q 17

EU-CEE WB-6 CIS+Ukraine Turkey (rhs)

slide-5
SLIDE 5

5

Remark: Current forecast and revisions relative to the wiiw Autumn forecast 2017. Colour scale reflects variation from the minimum (red) to the maximum (green) values. Source: wiiw forecast.

Real GDP growth revisions, regional and by country

Forecast revisions: Mostly positive upgrades in 2018, mixed for 2019

slide-6
SLIDE 6

6

Remark: Current forecast and revisions relative to the wiiw Autumn forecast 2017. Colour scale reflects variation from the minimum (red) to the maximum (green) values. Source: wiiw forecast.

Real GDP growth forecast, regional and by country

Growth forecasts: Convergence will continue in next three years

Forecast, % 2017 2018 2019 2020 EU-CEE 4.4 3.9 3.4 3.2 WB 2.5 3.3 3.2 3.2 Turkey 6.5 4.5 4.1 3.9 CIS + Ukraine 2.1 2.0 1.9 1.9 CESEE-22 3.7 3.1 2.9 2.8

slide-7
SLIDE 7

7

Source: wiiw Annual Database incorporating national and Eurostat statistics, own calculation. Forecasts by wiiw.

Drivers of growth (I): Positive outlook for consumption

2 4 6 8 10 12 14 16 18 20 EU-CEE CIS + Ukraine Turkey Western Balkans

Unemployment rate, %

2016 2017 2018 2019

  • 10
  • 8
  • 6
  • 4
  • 2

2 4 6 8 EU-CEE CIS + Ukraine Western Balkans

Real wage growth, %

2015 2016 2017

slide-8
SLIDE 8

8

Source: Eurostat.

The share of residence permits issued to Ukrainians over total immigrants

Ukrainian migration helping to relieve labour shortages

0% 10% 20% 30% 40% 50% 60% 70% 80% PL CZ SK LT BG HU EE RO LV 2014 2015 2016

slide-9
SLIDE 9

9

Source: Eurostat.

Capacity utilisation, %, seasonally adjusted data.

Drivers of growth (II): Investment will grow faster than GDP in most places during the forecast period

50 55 60 65 70 75 80 85 90 DE CZ SI HU EA-19 SK PL TR LT RO BG LV EE HR MK RS ME 1Q 2018 4Q 2013

slide-10
SLIDE 10

10

Source: wiiw Annual Database incorporating national and Eurostat statistics, own calculation.

Exports of goods and services, % of GDP

Drivers of growth (III): Expansion of external sector means better placed to take advantage of upswing

10 20 30 40 50 60 70 80 90 Westerns Balkans HR, SI, BG, RO Baltics Visegrad 2000 2008 2016

slide-11
SLIDE 11

11

Source: wiiw Monthly Database incorporating national statistics.

Bank non-performing loans in % of total loans end of period

Banking sector mostly well placed to support growth

10 20 30 40 50 60 BG CZ EE HR HU LT LV PL RO SI SK AL BA ME MK RS XK BY KZ RU TR UA 3Q 17 3Q 13

slide-12
SLIDE 12

12

Note: Values represent average of 11 indicators. Historical average for Q4 2007 value = 2000- 2007, for Q4 2017 value = 2000-2017. Source: wiiw Annual Database incorporating national and Eurostat statistics, own calculation.

wiiw Overheating index, standard deviations from historical average

Is CESEE overheating?

  • 0.8
  • 0.4

0.0 0.4 0.8 1.2 1.6 TR HU BA RS MK AL SK HR RU EE ME RO CZ LV UA PL BG SI LT KZ 4q 2017 4q 2007 4Q 2017 4Q 2007

slide-13
SLIDE 13

13

Source: Yahoo! Finance.

Risks to growth (I): Global

End of ultra-loose monetary policy; bursting of bubbles; trade war S&P 500, January 2009=100

80 130 180 230 280 330 380 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18

slide-14
SLIDE 14

14

General government gross debt, in % of GDP

Risks to growth (II): Regional

Pockets of high corporate and/or sovereign leverage; East/West EU splits; threats to rule of law; Ukraine crisis; break up of the eurozone.

Source: wiiw Annual Database incorporating national and Eurostat statistics. 10 20 30 40 50 60 70 80 90 HR UA SI HU AL RS ME PL SK BY MK LT BA LV RO CZ TR BG KZ XK RU EE 2017 2007

slide-15
SLIDE 15

15

Note: CESEE wages based on register-based surveys, Austria refers to national account data. Source: wiiw Annual Database incorporating national and Eurostat statistics, own calculation.

Indicators of convergence, Austria=100

Convergence: Success but also disappointment

10 20 30 40 50 60 70 80 CZ SI SK LT EE PL HU LV KZ RO HR RU BG BY ME RS MK BA AL XK UA Per capita GDP, 2000 Per capita GDP, 2017 Wages Wages, 2017

slide-16
SLIDE 16

16

Note: Figures based on Eurostat baseline scenario. Source: Eurostat; own calculations.

Demographic trends in working-age population change in % compared to 2015

Long-term challenge 1: Demographic decline

  • 60
  • 50
  • 40
  • 30
  • 20
  • 10

EU-CEE BG CZ EE HR HU LT LV PL RO SI SK EU-28 2025 2035 2045 2055 2065 2075

slide-17
SLIDE 17

17

Note: Relative functional specialisation retrieved from inward greenfield FDI projects in the manufacturing sector. For each function the global average equals 1. Source: fDi markets database, wiiw calculations.

Functional specialisation, averages 2003-2015

Long-term challenge 2: Can CESEE break out of semi-periphery trap?

0.0 0.5 1.0 1.5 HQ R&D Production Logistics Support services

CZ

0.0 0.5 1.0 1.5 HQ R&D Production Logistics Support services

AT

slide-18
SLIDE 18

18

Growth at highest level for six years. Outlook positive In general no overheating Several risks to growth Convergence will continue, with long-term challenges

Conclusions

slide-19
SLIDE 19

19

Wiener Institut für Internationale Wirtschaftsvergleiche The Vienna Institute for International Economic Studies

www.wiiw.ac.at

Thank you for your attention!

Follow us: www.wiiw.ac.at

slide-20
SLIDE 20

20

Country codes

AL Albania ME Montenegro BY Belarus MK Macedonia BA Bosnia and Herzegovina PL Poland BG Bulgaria RO Romania CZ Czech Republic RS Serbia EE Estonia RU Russia HR Croatia SI Slovenia HU Hungary SK Slovakia KZ Kazakhstan TR Turkey LT Lithuania UA Ukraine LV Latvia XK Kosovo CESEE Central, East and Southeast Europe CIS Commonwealth of Independent States EU-CEE European Union – Central and Eastern Europe WB Western Balkans