Ooni Koda
  1. Home
  2. /
  3. Newsfeed
  4. /
  5. WB: Reforms Can Support Inclusive Growth in Turbulent...

WB: Reforms Can Support Inclusive Growth in Turbulent Economic Times

July 21, 2022

Brussels, July 18, 2022 - Reforms supported by investments in green and digital infrastructure and human capital can boost, and even double, the growth potential in some EU member states between now and 2030, according to a new World Bank report.   The latest European Union Regular Economic Report – Living Up to Potential in the Wake of Adverse Shocks – reviews how some EU member states can navigate turbulent economic times to foster long-term growth and inclusion following a pandemic, an ongoing conflict in the region and a cost-of-living crisis.   “Two consecutive shocks, in quick succession, risk stalling the recovery in the EU.” said Gallina A. Vincelette, Regional Director for the European Union Countries at the World Bank. “The pandemic depleted national budgets and the war in Ukraine leaves governments facing an uphill battle to tackle high inflation, low growth and a cost-of-living crisis that is hitting the most vulnerable hard. But in the face of adversity lies opportunity. Stronger institutions and better governance to carry out difficult reforms and ensure inclusive, green, and resilient growth are the order of the day.”   Many EU member state economies have recovered to pre-pandemic levels of growth, although at an uneven pace. After contracting by 5.9 percent in 2020, EU27’s economy bounced back in 2021, its strongest post-recession recovery to date. This was largely driven by a relaxation of COVID-19 restrictions that has since bolstered demand, while unprecedented policy support, increased adaptation, and high vaccination uptake supported recovery.   The report recommends that governments build on this encouraging return to growth. In this context, reforms supported by the European Union Member States National Recovery and Resilience Plans (NRRPs) provide a good starting point for countries to address constraints.   “Scarred labour markets, tightening credit, disrupted supply chains, and slowing innovation have shown us how a crisis can reverse years of income gains,” Vincelette added. “But there is hope for correcting the course if countries invest prudently, prioritize life-long learning, and remove barriers to firm entry and trade while fostering more competition. Increased attention to the green transition also provides an excellent opportunity for EU member states to decouple economic growth from environmental degradation and put countries on a more sustainable path.”   The report finds that in the long term, higher investment along with reforms, such as increasing labour force participation, integrating migrant workers, strengthening institutions, and improving educational outcomes can raise potential output. If these reforms are implemented, potential growth through the end of this decade (2022-30) in Poland and Romania could significantly outperform the previous decade, while Bulgaria and Croatia could see growth double from the current baseline scenario.   These reforms could propel average potential growth during 2022-30 to 4.6 percent in Bulgaria, 3.5 percent in Croatia, 4 percent in Poland, and 5.2 percent in Romania - the highest of the four countries analyzed in the most recent World Bank report .   Romania’s growth may be the highest in the last decade and can be achieved by improving labor market participation, integrating migrant labor, streamlining institutions and improving educational outcomes.   Undertaking ambitious reform agendas would set these EU member states on the path to stronger convergence with the EU average per capita income levels and offset adverse impacts from the pandemic and war.   The World Bank’s Regional Action in Europe and Central Asia   To date, the World Bank has committed more than $1.7 billion to help emerging economies in Europe and Central Asia mitigate the impacts of COVID-19. While the combined total support mobilized by the World Bank for Ukraine now stands at more than $925 million.    The World Bank’s Global Economic Prospects suggests that global growth is expected to slump from 5.7 percent in 2021 to 2.9 percent in 2022— significantly lower than the 4.1 percent that was anticipated in January 2022. It is expected to hover around that pace over 2023-24, as the war in Ukraine disrupts activity, investment, and trade in the near term; as pent-up demand fades, and as fiscal and monetary policy accommodation is withdrawn.  

The text of this article has been partially taken from the publication:
http://actmedia.eu/daily/wb-reforms-can-support-inclusive-growth-in-turbulent-economic-times/98687
Read in full - click here
Romania vows to support Moldova’s European path as Moldovan companies are looking to access Western investors through the Bucharest Stock Exchange

Romania is firmly committed to supporting Moldova’s European path and the Bucharest Stock Exchange can help strengthen the economic cooperation between the two countries allowing Moldovan companies to draw capital from Romanian and Western investors, according to Romanian top officials present at the Moldova-Romania Capital Bridges forum in Bucharest, on March 27, 2024. Meanwhile, Moldovan […]

Supermarkets will remain open on weekends, Romanian PM says

Romanian prime minister Marcel Ciolacu said on Thursday, March 28, that the stores will not be closed on weekends, as proposed by small-format retailers. “I want to close a topic that has triggered public debate: the one related to operating hours and closing stores on weekends. From all the signals received from society, it is […]

New shopping center to open in Romania’s Sinaia mountain town

A new shopping center is set to open at the exit from Sinaia, a popular mountain town in Prahova Valley, some 120 km north of Bucharest. According to mayor Vlad Oprea, Sinaia Plaza “will open soon” after an investment of EUR 5 million. Mayor Oprea said that this will be the largest shopping center in […]

Symmetrica invests EUR 48 mln in new concrete pavements factory near Bucharest

Symmetrica, a Romanian company that produces pavements, curbs, and vibro-pressed gutters for pedestrians and roadways, said it’s investing EUR 48 million in a new concrete pavements factory. Located in Bolintin Vale, near Bucharest, the new unit will be inaugurated this autumn. According to the company, the factory will be the largest of its kind in […]

Head of Romania's Consumer Protection Agency to run for mayor of Constanța

Horia Constantinescu, the president of Romania's National Authority for Consumer Protection (ANPC), has been chosen as the candidate for mayor of the Black Sea port city of Constanța by the Social Democratic Party (PSD).  Constantinescu, 50, has had a controversial term as head of the Consumer Protection Agency, attracting criticism from employer organizations, fast-food giants, […]

Romanian president approves law prohibiting sale of electronic cigarettes to minors

Romanian president Klaus Iohannis recently approved a law initiated by Social Democrat (PSD) deputy Alfred Simonis prohibiting the sale of electronic cigarettes to minors.  The law aims to reduce the exposure of children and young people to tobacco products and discourage smoking among young people. It also bans such products from being sold through vending […]