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Europe > Montenegro

You are looking at 1 - 7 of 7 items for :

  • Type: Journal Issue x
  • Macroeconomics and Monetary Economics x
  • IMF Working Papers x
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Cover IMF Working Papers
Inflation Dynamics in the Western Balkans
Gohar Minasyan
,
Ezgi O. Ozturk
,
Magali Pinat
,
Mengxue Wang
, and
Zeju Zhu
After trailing Euro Area inflation closely in the recent past, inflation in the Western Balkans has accelerated faster since early 2022 on the back of the shocks to global commodity prices, strong recovery from the pandemic, and lingering supply bottlenecks. This paper employs two complementary empirical approaches of an augmented Phillips curve and structural VAR, adapting them to the data availability and country specificities of the Western Balkans, to analyze the inflation dynamics in the region. It finds that international food prices affect not only headline but also core inflation as well as inflation expectations. Further, inflation in the Western Balkans is not just determined by foreign shocks, and domestic factors, aggregate demand shocks in particular, have a significant impact on inflation. These findings imply a possible role for policies to temporarily limit an immediate and complete pass-through of international to domestic food prices while also stressing the importance of an appropriate domestic macroeconomic policy mix to keep inflation expectations anchored and safeguard credibility in the face of high inflation persistence.
Keywords:
Inflation; Western Balkans; international food price shocks; commodity price shocks; Phillips curve; panel data; structural VAR; inflation expectation; inflation dynamics; inflations determinant; inflation development; inflation in the Western Balkans; Food prices; Energy prices; Nominal effective exchange rate; Global; Europe
Cover IMF Working Papers
Being Poor, Feeling Poorer: Inequality, Poverty and Poverty Perceptions in the Western Balkans
Zsoka Koczan
Emerging Europe has undergone a major economic transformation over the past 25 years. Most countries experienced initial drops in output during transition, followed by recovery in the second half of the 1990s. The path of transition in the Western Balkans has however been particularly uneven. The effects of transition also seem to have been more traumatic and persistent in the Western Balkans, and nostalgia for the past appears to be more prevalent here than in other former communist regions. Such dissatisfaction has important implications for the political economy of further reforms. This paper aims to inform policy by complementing the analysis of standard macro-level measures of inequality and poverty with a household-level analysis of subjective perceptions of poverty. We find that many more people appear to feel poor than are classified as such using purely income-based measures. Uncertainty, in particular related to expectations of future income and vulnerability to shocks, appears to be a key driver behind this discrepancy.
Keywords:
WP; center; poverty perception; poverty measure; capital expenditure; household expenditure; Inequality; Poverty; Western Balkans; Subjective poverty measures; farm income; poverty indicator; poverty gap; poverty in the Western Balkans; Personal income; Income inequality; Poverty measurement; Central and Eastern Europe; Europe
Cover IMF Working Papers
Fiscal Deficit and Public Debt in the Western Balkans: 15 Years of Economic Transition
Zsoka Koczan
In this paper we analyze how Western Balkans public finances adapted to the boom-bust cycle. Large capital inflows into emerging European economies during the mid-2000s resulted in rapid economic growth and convergence to EU income levels. This also resulted in improved fiscal positions of most countries, on the back of strong revenue performance. Yet, since the onset of the global economic crisis, many countries have struggled to adjust to the new situation of lower external financing and lower growth.
Keywords:
WP; debt; government; country
Cover IMF Working Papers
Does Supply or Demand Drive the Credit Cycle? Evidence from Central, Eastern, and Southeastern Europe
Greetje Everaert
,
Ms. Natasha X Che
,
Ms. Nan Geng
,
Bertrand Gruss
,
Gregorio Impavido
,
Miss Yinqiu Lu
,
Christian Saborowski
,
Mr. Jerome Vandenbussche
, and
Mr. Li Zeng
Countries in Central, Eastern, and Southeastern Europe (CESEE) experienced a credit boom-bust cycle in the last decade. This paper analyzes the roles of demand and supply factors in explaining this credit cycle. Our analysis first focuses on a large sample of bank-level data on credit growth for the entire CESEE region. We complement this analysis by five case studies (Latvia, Lithuania, Montenegro, Poland, and Romania). Our results of the panel data analysis indicate that supply factors, on average and relative to demand factors, gained in importance in explaining credit growth in the post-crisis period. In the case studies, we find a similar result for Lithuania and Montenegro, but the other three case studies point to the fact that country experiences were heterogeneous.
Keywords:
WP; credit growth; demand and supply; credit demand; credit supply; parent bank; Credit; Eastern Europe; Disequilibrium Model; bank characteristic; excess supply; asset quality; excess demand; credit to household; demand and supply factor; bank funding; demand development; Consumer credit; Credit booms; Loans; Bank credit; Global; Baltics
Cover IMF Working Papers
Fiscal Consolidation in Southeastern European Countries: The Role of Budget Institutions
Mr. Brian Olden
,
Mr. Duncan P Last
,
Mr. Sami Yläoutinen
, and
Ms. Carla Sateriale
This paper assesses the relative strengths and weaknesses of fiscal institutions in ten Southeastern European countries, using recent benchmarking methodologies developed by FAD. The assessment evaluates each country’s understanding of the scale of the fiscal adjustment challenge, its ability to develop a credible consolidation strategy, and its capacity to implement the strategy. Key institutional arrangements, are generally in place, including top-down budgeting and medium-term budget frameworks. Other institutional arrangements require further attention, including macro-fiscal forecasting, fiscal risk analysis, setting fiscal objectives, presence and role of independent fiscal agencies, and top-down parliamentary approval.
Keywords:
WP; European country; budget institution; annual budget; consolidation strategy; orientation debate; Southeastern Europe; Fiscal Consolidation; Budget Institutions; consolidation program; nonfinancial enterprise; policy action; Budget planning and preparation; Fiscal risks; Macroeconomic and fiscal forecasts; Budget execution and treasury management; Eastern Europe; Europe
Cover IMF Working Papers
Inclusive Growth, Institutions, and the Underground Economy
Mr. Adil Mohommad
,
Mr. Anoop Singh
, and
Ms. Sonali Jain-Chandra
Worldwide protests against the perceived lack of economic opportunity and failure of governance have refocused attention on the need for inclusive growth and strong institutions. In developing countries, large informal economies limit state capacity to deliver governance and strong institutions, which in turn discourages participation in and expansion of the formal economy. This paper analyzes the determinants of the underground economy, with particular emphasis on the role of institutions and the rule of law. We find that when businesses are faced with onerous regulation, inconsistent enforcement and corruption, they have an incentive to hide their activities in the underground economy. Empirical analysis suggests that institutions are a more important determinant of the size of the underground economy than tax rates.
Keywords:
WP; economy; underground economy; shadow economy; economic activity; institutions; IFS database; shadow economy rise; size of the shadow economy; informal economy limit; unofficial economy; Informal economy; Global
Cover IMF Working Papers
The Impact of the Global Crisison South-Eastern Europe
Francesco Spadafora
,
Mr. Emidio Cocozza
, and
Mr. Andrea Colabella
This paper analyzes the impact of the global crisis on six South-Eastern European countries. The main objective is to compare macro-financial conditions and policies in the run-up to the crisis as well as to compare the policy responses to it, so as to highlight, inter alia, possible country-specific constraints. While sharing a common pre-crisis pattern of strong capital inflows and robust growth, a key difference in the conduct of macroeconomicpolicies is that some countries adopted expansionary (and procyclical) fiscal policies. These moves exacerbated external vulnerabilities and compromised the ability to discretionarily use the fiscal instrument in acountercyclical fashion.
Keywords:
WP; current account; budget deficit; foreign currency; financial support; core inflation; international capital flows; current account adjustment; IMF financial support; FYR Macedonia; transmission mechanism; short-term debt; Current account deficits; Budget planning and preparation; Government debt management; Global; Western Europe