The economic recovery of candidate and potential European Union accession candidate countries in the first half of 2010 saw strong contrasts, with Croatia and Iceland still under pressure from the crisis, while Turkey recorded a spectacular recovery, the European Commission said in its latest quarterly report.
In the second quarter, Croatian GDP declined again, by 2.5% on the year, primarily due to a decline in personal spending. The GDP decline rate was the same in the first quarter, the Commission said in the Q2 2010 report.
On the other hand, Turkey's economy went up 10.3% in Q2, after a 11.7% rise in Q1, thanks to growing investment and strong domestic consumption.
The downturn period in most Western Balkan countries appears to be over, Brussels said, noting that net exports were the main recovery generator.
At the same time, the situation on the labour markets in the region is still deteriorating and there are no palpable improvements as yet when it comes to unemployment.
Unemployment in Croatia in Q2 went up to 12.4% from 11.2% in the first three months of the year. In Bosnia and Herzegovina, unemployment went up from 42.6% in Q1 to 43.1% in Q2.
The Western Balkans recorded a general improvement in trade and the balance of payments thanks to a slowing down in import growth and rising exports.
Croatia's balance of payments deficit went down from 4.4% in Q1 to 3.1% in Q2.
Fiscal plans for 2010 were generally very restrictive, with varying implementation results, from poorer than planned in Croatia, Bosnia, Serbia and Macedonia to better in Albania and Montenegro.
The Q2 deficit in Albania and Montenegro declined on the year, primarily thanks to unexpectedly high tax revenue in Albania and significant budget spending cuts in Montenegro, said the report.
