T U R N I N G T R A N S I T I O N I N T O P R O S P E R I T Y

New economic realities: a quest for sustainable sources of economic

development of the Black Sea regionOleg Ustenko

Executive Director, The Bleyzer Foundation

October 24-25, 2013, CrimeaІV INTERNATIONAL BLACK SEA ECONOMIC FORUM

T U R N I N G T R A N S I T I O N I N T O P R O S P E R I T Y

a quest for sustainable development…

• Export-led recovery remains unimpressive on Eurozone weaknesses and a slower growth in Russia.

• Tighter access to external borrowing limits the growth of investment and consumer spending, especially in smaller countries.

• Consumer led recovery looks particularly shaky in Ukraine on concerns of weak public finances, slowing exports and surging external funding needs.

• Credit growth to private sector is sluggish, especially in Ukraine, Romania and Bulgaria.

• A shift toward investment-based growth is not happening on poor investment climate, especially in Russia and Ukraine.

• Higher private domestic and foreign investments are essential to unlock potential sources of economic growth in energy, infrastructure, transportation and agriculture.

T U R N I N G T R A N S I T I O N I N T O P R O S P E R I T Y

Source: IMF

Economic Growth% annual change

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Source: IMF

Per capita GDPbased on PPP, thousand current international dollars

T U R N I N G T R A N S I T I O N I N T O P R O S P E R I T Y

Source: State Statistics Committee of Ukraine

Sources of Economic Growthcontributions to GDP growth, percentage points

UKRAINE

T U R N I N G T R A N S I T I O N I N T O P R O S P E R I T Y

Source: World Bank

Sources of Economic Growthcontributions to GDP growth, percentage points

RUSSIA

T U R N I N G T R A N S I T I O N I N T O P R O S P E R I T Y

Source: World Bank, OECD

Sources of Economic Growthcontributions to GDP growth, percentage points

TURKEY

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Source: World Bank, OECD

Sources of Economic Growthcontributions to GDP growth, percentage points

BULGARIA

T U R N I N G T R A N S I T I O N I N T O P R O S P E R I T Y

Source: World Bank, OECD

Sources of Economic Growthcontributions to GDP growth, percentage points

ROMANIA

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Source: World Bank, Asian Development Bank, TBF

Sources of Economic Growthcontributions to GDP growth, percentage points

GEORGIA

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Source: IMF, World Bank

The End of The Credit Boomcredit to private sector, % annual change

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Source: IMF

Macroeconomic vulnerabilitiesconsumer prices, % annual change

T U R N I N G T R A N S I T I O N I N T O P R O S P E R I T Y

Source: IMF

Macroeconomic vulnerabilitiescurrent account, % of GDP

T U R N I N G T R A N S I T I O N I N T O P R O S P E R I T Y

Source: IMF

Macroeconomic vulnerabilitiesgeneral government revenue minus expenditure, % of GDP

T U R N I N G T R A N S I T I O N I N T O P R O S P E R I T Y

Source: IMF

Macroeconomic vulnerabilitiesgross government debt, % of GDP

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Source: Deutsche Bank AG

Macroeconomic vulnerabilitiesCredit Default Swaps, percentage points

T U R N I N G T R A N S I T I O N I N T O P R O S P E R I T Y

Source: World Bank, WEF, Transparency International, The Heritage Foundation

Investment Climate

Index of Economic Freedom

Ease of doing business rank

Global Competitiveness

Index

Government effectiveness, percentile rank

(higher number - better

performance)Corruption

Perception Index