1. From Crisis to Recovery
Florian Fichtl,
Country Manager
World Bank
October 19, 2009

2. Recovery underway Industry has stopped shrinking Europe & Central Asia
Middle-East & North Africa
East Asia & Pacific
South Asia
Europe & Central Asia

3. Recovery underway Interest rates are lower
Emerging-market bond spreads have fallen but remain higher than pre-crisis levels
Source: World Bank, DEC Prospects Group

4. …but private sector funding depressed
Syndicated bank loans by borrower type (2009 q3 as of Aug. 25) 4

5. NMS affected severely by the crisis
Source: Eurostat

6. Tough times ahead for governments
Rapidly falling revenues
Rising social expenditures and pension debt
Source: IMF World Economic Outlook

7. Tough times for households and businesses
Unemployment will recover slowly
Difficulties in repaying bank credit
Number of vulnerable household increase
Rising insolvencies
Difficult access to credit

8. Tough times for banks
Can no longer rely on large capital flows from abroad
Non-performing loans are rising
Profits decline
Domestic credit (percentage change, year-on-year)

9. The way ahead
Return to growth might take longer in the region than in the rest of the EU
This means smaller budgets for governments—need to restructure spending to support the vulnerable and growth enhancing activities
Continued attention to financial sector stability—lower access to credit and rising NPLs
Structural transformation of economy will depend on further improvements in product and labor markets.