financial stability report - Banka Qendrore e RepublikÃ«s sÃ« KosovÃ«s

More documents

Recommendations

Info

Number 3 Financial Stability Report 3. World Economy Global economic activity is experiencing growth slowdown in 2012. Global economic growth is estimated to have slowed at 3.3 percent compared to the annual growth of 3.8 percent in 2011. The slowdown in economic growth was more significant in European countries, where the decline in domestic demand as well as uncertainty caused by fiscal sector during 2012 have contributed to the decline in consumption and investments. Even the developing countries are expected to be characterized by a slowdown in economic growth, as growth in domestic demand is expected to be reduced due to tightened monetary policies. According to IMF projections, in 2012 the United States is expected to expand economic activity with real GDP growth of 2.2 percent compared with 1.8 percent in 2011. This growth is expected to be driven mainly by investments which are expected to be 4.6 percent higher compared with the previous year (Table 1). Eurozone economy is expected to shrink by 0.4 percent in 2012 compared with the growth of 1.4 percent in 2011. Unlike the U.S., in eurozone the main cause of the recession is expected to be the investments, which are expected to be reduced by 1.5 percent compared with the previous year. Almost all the eurozone countries are expected to have a decline or lower economic growth rate compared to 2011, except Germany, which is expected to have a positive growth rate of 1.9 percent compared with 1.3 percent in the previous year. Economic contraction in the eurozone is expected to have consequences on fiscal and financial sector in the following periods, which will hinder the overcoming of the public debt crisis and decrease the confidence level in the markets as well as increase the financing cost and non-performing loans in financial institutions. Table 1. Main macroeconomic indicators Description GDP Inflation Current account (% of GDP) 2011 2012 2011 2012 2011 2012 World economy 3.8 3.3 6.9 6.2 0.6 0.3 USA 1.8 2.2 3.1 2.0 -3.1 -3.1 Eurozone 1.4 -0.4 2.7 2.3 0.4 1.1 Developing countries 6.2 5.3 7.2 6.1 1.9 1.3 Central and Southeastern Europe 5.3 2.0 5.3 5.6 -6.1 -5.0 Source: IMF (2012) Recent global financial crisis was reflected in the continued growth of public debt in developed countries. Meanwhile, the forecasts on a weaker performance of the real sector in most developed countries have increased the uncertainty of market participants about the sustainability of fiscal policy and public debt. Consequently, at the end of 2011, the level of public debt in the eurozone reached at 87.3 percent of GDP (27.3pp above the Maastricht criteria), compared with 85.3 percent of GDP recorded in 2010. Data for the end of the first half of 2012 show a further increase of the public debt, which reached 90.0 percent of GDP. Almost all countries of the eurozone deepened the level of public debt in the first half of 2012, especially states that already had high level of public debt. On the other hand, Greece, which has the highest level of public debt in the eurozone, managed to reduce it for 21.0pp (Table 2). 18 |
Financial Stability Report Number 3 Table 2. Public debt and budget balance in selected Eurozone countries Description Greece Italy Portugaly Ireland Belgium 2010 2011 Jun 2012 2010 2011 Jun 2012 2010 2011 Jun 2012 2010 2011 Jun 2012 2010 2011 Jun 2012 Public debt 145.0 165.3 144.3 118.6 120.1 126.1 93.3 107.8 117.5 92.5 108.2 111.5 96.0 98.0 102.5 Budget balance -10.6 -9.1 -8.8 -4.4 -3.8 -5.0 -9.8 -4.4 -6.8 -31.1 -13.3 -9.3 -4.1 -4.0 -3.2 Source: Eurostat Public debt in the Eurozone deepened despite the budget deficit decline from 6.3 percent of GDP in 2010 to 4.2 percent in 2011. Also data for the first half of 2012 show a decline of the budget deficit (3.7 percent of GDP). Despite the decline of the budget deficit, due to the lack of economic growth, maintaining the debt sustainability in the eurozone is considered to be challenging. The world economy is characterized by a decrease in the level of inflation in the first half of 2012. By the end of 2012, IMF has forecasted the average global rate of inflation at 6.2 percent (6.9 percent in 2011). The decrease in the oil price and consequently the decrease of food and electricity prices are expected to be the major contributors to the decrease of inflationary pressures in developed countries as well as in developing countries. Inflation in developed Figure 1. Inflation in selected Eurozone countries 6 5 4 3 2 1 0 -1 -2 countries in 2012 is expected to be 2.3 percent (3.0 percent in 2011) while in developing countries inflation is expected to be 6.1 percent (7.2 percent in 2011). According to current data, the average inflation in the U.S. in the first half of this year has decreased to 2.0 percent (3.1 percent in the same period of 2011), while in the eurozone has dropped to 2.5 percent (2.7 percent in the same period of 2011). Due to the debt crisis that has caused the decline in aggregate demand, there is a more significant decrease of the inflation rate in Greece and Spain (Figure 1). Figure 2. Unemployment in selected Eurozone Regarding unemployment, the countries current data indicate a decrease in 25 unemployment growth rate of the 20 most powerful world economies. In 15 the U.S. the unemployment rate 10 decreased to 8.2 percent in the second quarter of 2012 (8.7 percent 5 at the end of 2011), 4.4 percent in 0 Japan (4.5 percent in 2011), 4.0 percent in China (4.0 percent in 2011) and 6.0 percent in Russia 2010 2011 June 2012 (6.5 percent in 2011). While the Source: Eurostat (2012) unemployment rate in the eurozone has continued to grow as a result of the economic slowdown in 2012, increasing Italy Portugal Austria France Germany Spain 2010 2011 June 2012 Source: Eurostat (2012) Spain Greece Portugal Ireland Italy France Germany Greec Austria | 19
Page 1 and 2: BANKA QENDRORE E REPUBLIKES SË KOS
Page 3 and 4: Financial Stability Report Number 3
Page 19: Financial Stability Report Number 3
Page 71 and 72:
Financial Stability Report Number 3
Page 73 and 74:
Page 75 and 76:
Page 77 and 78:
Page 79 and 80:
Page 81 and 82:
Page 83 and 84:
Page 85 and 86:
Page 87 and 88:
Page 89 and 90:
Page 91 and 92:
Page 93 and 94:
Page 95 and 96:
Page 97 and 98:
Page 99 and 100:
Page 101 and 102:
Page 103 and 104:
Page 105 and 106:
Page 107 and 108:
Page 109 and 110:
Page 111 and 112:
Page 113 and 114:
Page 115 and 116:
show all

financial stability report - Banka Qendrore e RepublikÃ«s sÃ« KosovÃ«s

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?