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Bulgaria Economic Forum

Theo Thomas,Lead Economist

Sluggish recovery, with diversity across in Europe

GDP growth (percent)

Source: Ameco, European Commission; World Bank staff estimates 1.4

2.6-0.52.6

2.42.5

3.2

2.9

2.5

1.9

3.2

GDP growth in 2014

Access to credit will be critical for new investment, but foreign deleveraging continues

Source: European Central Bank; World Bank staff calculations

Real Credit Growth, EU11 and EU15Index October 2008 = 100

Change in Total International Claims by Country, 2nd Quarter of 2013 to 2nd Quarter of 2014 (Billions of EUR)

Investment was further damped by sluggish bank lending, and by rising real interest rates as inflation approached zero or even turned negative

As the pace of fiscal consolidation slows, the focus will be on the quality of spending

Source: World Bank staff forecasts based on European Commission, Winter Forecast, 2014

Fiscal deficit, percent of GDP

-8

-7

-6

-5

-4

-3

-2

-1

02008 2009 2010 2011 2012 2013 2014(p) 2015(f) 2016(f)

EU15

EU11

EU11 South

EU11 Continental

EU11 North

While youth and low-skilled continue to be most scarred by the poor labor markets

BU

HR

CZET

HULV

LT

RO

PLSR

SL

0

5

10

15

20

25

-20 -10 0 10 20 30

Rate

s of y

outh

NEE

Ts, 2

013

(per

cent

)

Projected population growth 2012-2035 (percent)

EU15 EU11

Source: Eurostat, UN and authors calculations

EU11 countries are ageing rapidly, while youth inactivity rates are high…..

…and often associated with low skills

BUHR

CZ

ET

HU

LV

LI

RO

PLSL

SL

0

5

10

15

20

25

10 15 20 25 30 35 40 45 50percent below

level 2 in maths

NEET Rates of youth not in education, employment and training (NEET) and maths skills

EU15 EU11

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