{
  "title": "The Emerging Bright Spot in Europe",
  "publication": "IMF Blog, May 18, 2011",
  "sourceUrl": "https://www.imf.org/en/blogs/articles/2011/05/18/emerging-bright-spot-in-europe",
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  "summary": "Author: Antonio Borges",
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    {
      "heading": "Overview",
      "content": "- Author: Antonio Borges\n- Date: May 18, 2011\n- Context: Contrasts persistent troubles in Portugal, Greece, and Ireland with a strong comeback in many economies in emerging Europe following the 2008/09 financial crisis."
    },
    {
      "heading": "Recent growth patterns and key statistics",
      "content": "- Lithuania grew \"an eye-catching 14.7 percent in the first quarter of 2011.\"\n- Estonia: \"exports of goods in the fourth quarter of 2010 were 52 percent higher than a year earlier.\"\n- Current account deficits during the boom years: \"25 percent of GDP in Latvia and almost 30 percent of GDP in Bulgaria.\"\n- Recovery breadth: \"growth is driven by exports and manufacturing\" and is \"broadening to include investment and even consumption.\"\n- Outlook for 2011: \"domestic demand is set to become the main growth engine in emerging Europe.\"\n- Past crisis timing referenced as the \"2008/09 financial crisis.\"\n- Wage dynamics: the \"wage explosion of 2007-08 has given way to a decline in labor costs across the region.\""
    },
    {
      "heading": "Drivers of the turnaround",
      "content": "- Markets at work:\n  - Profitability shifted away from real estate, construction, and finance (previously artificially inflated by asset price bubbles and under-pricing of risk) toward other sectors, notably manufacturing and exports.\n  - Improvement in competitiveness supported the sectoral reallocation.\n- Policies:\n  - \"Painful but determined fiscal adjustment put public finances back on track,\" reducing perceived risk.\n  - Example: Latvia’s credit default swap spread \"is 200 basis points today―down from 1100 basis points in 2009.\""
    },
    {
      "heading": "Policy recommendations to sustain recovery and raise long-term growth",
      "content": "- Structural policy priorities:\n  - \"Remove bottlenecks in energy, transportation, and communication\" to boost productivity.\n  - Use \"funding from the European Union\" to overcome domestic resource constraints for infrastructure and reforms.\n  - \"Efforts to upgrade the skills of the labor force\" to enable industry to climb the quality ladder.\n- Macroeconomic policy guidance to prevent future boom-bust cycles:\n  - Apply tighter policies when the next boom takes off to reduce the risk of overheating and resource diversion into low-competition sectors (real estate, banking).\n  - When revenues are growing strongly, avoid using them to increase spending and public wages as was done during the boom years.\n  - Build up savings during boom years to \"stimulate the economy during a downturn,\" noting that \"large, even very large, surpluses may be needed during boom years.\""
    },
    {
      "heading": "Remaining challenges and outlook",
      "content": "- Recovery rebuilding lost output will take time for many crisis-hit countries.\n- Emerging Europe has significant scope to catch up with advanced Europe, but catching-up requires the \"right policies\"; otherwise countries risk getting \"stuck,\" as illustrated by Greece, Ireland, and Portugal.\n\nAntonio Borges, May 18, 2011\n\n---\n\n Content in this bundle\n\n- O foco positivo que emerge na Europa Por Antonio Borges\n  - O foco positivo que emerge na Europa Por Antonio Borges (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - O foco positivo que emerge na Europa Por Antonio Borges (PDF){rel=\"external\" type=\"application/pdf\"}\n- Новое светлое пятно в Европе - Антонио Боржес\n  - Новое светлое пятно в Европе - Антонио Боржес (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Новое светлое пятно в Европе - Антонио Боржес (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/blogs/articles/2011/05/18/emerging-bright-spot-in-europe"
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    "Authors: Antonio Borges",
    "Published: May 18, 2011",
    "Author: Antonio Borges",
    "Date: May 18, 2011",
    "Context: Contrasts persistent troubles in Portugal, Greece, and Ireland with a strong comeback in many economies in emerging Europe following the 2008/09 financial crisis.",
    "Lithuania grew \"an eye-catching 14.7 percent in the first quarter of 2011.\"",
    "Estonia: \"exports of goods in the fourth quarter of 2010 were 52 percent higher than a year earlier.\"",
    "Current account deficits during the boom years: \"25 percent of GDP in Latvia and almost 30 percent of GDP in Bulgaria.\"",
    "Recovery breadth: \"growth is driven by exports and manufacturing\" and is \"broadening to include investment and even consumption.\"",
    "Outlook for 2011: \"domestic demand is set to become the main growth engine in emerging Europe.\"",
    "Past crisis timing referenced as the \"2008/09 financial crisis.\"",
    "Wage dynamics: the \"wage explosion of 2007-08 has given way to a decline in labor costs across the region.\"",
    "Markets at work:",
    "Policies:",
    "Structural policy priorities:",
    "Macroeconomic policy guidance to prevent future boom-bust cycles:",
    "Recovery rebuilding lost output will take time for many crisis-hit countries.",
    "Emerging Europe has significant scope to catch up with advanced Europe, but catching-up requires the \"right policies\"; otherwise countries risk getting \"stuck,\" as illustrated by Greece, Ireland, and Portugal.",
    "**O foco positivo que emerge na Europa Por Antonio Borges**",
    "**Новое светлое пятно в Европе - Антонио Боржес**"
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