Page

Explanatory notes

v

Abbreviations

vi

Preface

vii

Chapter 1 POSTWAR RECONSTRUCTION AND DEVELOPMENT IN SOUTH-EAST EUROPE

1

1.1 Introduction

1

1.2 Pre-war conditions and the burden of the past

2

(i) A decade of economic decline

2

(ii) South-east Europe on the eve of the Kosovo conflict

5

1.3 Impact of the war

13

1.4 Postwar recovery strategies

17

Chapter 2 THE ECONOMIC SITUATION IN THE ECE REGION IN MID-1999

23

2.1 The global context

23

2.2 The western market economies

25

(i) Monetary conditions

29

(ii) The short-term outlook

31

2.3 Central and easten Europe and the CIS

32

(i) Output and demand

33

(ii) Inflation

38

(iii) Unemployment

40

(iv) Trade

42

(v) Current account and financial developments

48

(vi) Short-term outlook

50

STATISTICAL APPENDIX

53

LIST OF TABLES

Table

Page

1.2.1 Employment and unemployment in the south-east European transition economies, 1996-1998

4

1.2.2 Exports of selected south-east European transition economies by commodity and major partner groups, 1997

6

1.2.3 Structure of current account flows in the south-east European economies, 1998

11

1.2.4 Selected external financial indicators for the south-east European economies, 1998

12

1.3.1 Trade of the south-east European transition economies: exports and imports by direction, 1997

15

2.2.1 Real GDP in the seven major economies, 1997 QIII-1999 QI

26

2.2.2 Real GDP in the developed market economies, 1996-1999

32

2.3.1 Basic economic indicators for the ECE transition economies, 1996-1999

34

2.3.2 International trade and external balances of the ECE transition economies, 1996-1998

35

2.3.3 GDP and industrial output in the ECE transition economies, 1998-1999

36

2.3.4 Retail trade in the ECE transition economies, 1997-1999

37

2.3.5 Consumer prices in the transition economies, 1997-1999

39

2.3.6 Registered unemployment in the ECE transition economies, 1998-1999

41

2.3.7 Trade performance and trade balances of the ECE transition economies, 1998-1999

44

2.3.8 CIS countries’ trade with CIS and non-CIS countries, 1998-1999

48

2.3.9 Current account balances in selected ECE transition economies, 1997-1999

49

A.1 Real GDP in the ECE market economies, 1984-1998

54

A.2 Real private consumption expenditure in the ECE market economies, 1984-1998

55

A.3 Real general government consumption expenditure in the ECE market economies, 1984-1998

56

A.4 Real gross domestic fixed capital formation in the ECE market economies, 1984-1998

57

A.5 Real total domestic demand in the ECE market economies, 1984-1998

58

A.6 Real exports of goods and services in the ECE market economies, 1984-1998

59

A.7 Real imports of goods and services in the ECE market economies, 1984-1998

60

A.8 Industrial output in the ECE market economies, 1984-1998

61

A.9 Total employment in the ECE market economies, 1984-1998

62

A.10 Standardized unemployment rates in the ECE market economies, 1984-1998

63

A.11 Consumer prices in the ECE market economies, 1984-1998

64

B.1 Real GDP/NMP in the ECE transition economies, 1980, 1985-1998

65

B.2 Real total consumption expenditure in the ECE transition economies, 1980, 1985-1998

66

B.3 Real gross fixed capital formation in the ECE transition economies, 1980, 1985-1998

66

B.4 Real gross industrial output in the ECE transition economies, 1980, 1985-1998

67

B.5 Total employment in the ECE transition economies, 1980, 1985-1998

68

B.6 Registered unemployment in the ECE transition economies, 1990, 1994-1998

69

B.7 Consumer prices in the ECE transition economies, 1989-1998

70

B.8 Producer price indices in the ECE transition economies, 1989-1998

71

B.9 Nominal gross wages in industry in the ECE transition economies, 1990-1998

72

B.10 Merchandise exports of the ECE transition economies, 1980, 1986-1998

73

B.11 Merchandise imports of the ECE transition economies, 1980, 1986-1998

74

B.12 Balance of merchandise trade of the ECE transition economies, 1980, 1986-1998

75

B.13 Merchandise trade of the ECE transition economies by direction, 1980, 1986-1998

76

B.14 Exchange rates of the ECE transition economies, 1980, 1986-1998

77

B.15 Current account balances of the ECE transition economies, 1990-1998

78

B.16 Inflows of foreign direct investment in selected ECE transition economies, 1990-1998

79

LIST OF CHARTS

Chart

Page

1.2.1 GDP in selected south-east European transition economies, 1989-1998

3

1.2.2 GDP in selected central European transition economies, 1989-1998

3

1.2.3 Average per capita GDP at PPPs in the south-east European transition economies relative to central Europe and the EU average, 1990-1998

4

2.1.1 World commodity prices, January 1997-May 1999

25

2.2.1 Changes in real GDP, 1994 QI-1999 QI

27

2.2.2 Changes in consumer price indices in the euro area and the United States, January 1996-April 1999

28

2.2.3 Nominal interest rates, January 1997-June 1999

30

2.2.4 Euro reference rates, January 1999-June 1999 .

31

2.2.5 Bilateral exchange rates, January 1996-June 1999

31

LIST OF BOXES

Box

Page

2.3.1 Goskomstat revision of Russian unemployment

43