Economic growth is expected to accelerate in the Southeast European (SEE) countries next year, the World Bank said in a regular report.
Gross domestic product (GDP) growth rates in eleven SEE countries are seen varying between 1.2% in Croatia and 3.8% in Moldova next year, with eight of the countries posting economic growth of over 3.0%, according to figures from the World Bank's Global Economic Prospects June 2014 report released on Tuesday.
Only four of the SEE countries included in the report are expected to experience faster economic growth this year compared to 2013, while Croatia's economy is seen contracting again, albeit at a slower pace.
"While most developing countries in the Central and Eastern Europe sub-region are expected to see strengthening in growth this year as they continue to benefit from stronger import demand from the Euro Area, Turkey remains vulnerable to domestic and external shocks, including higher inflation, political uncertainty, and tighter global financial conditions," the World Bank said in its report.
Heightened tensions between the European Union (EU) and Russia are a key downside risk to the regional forecast, given the close economic interdependence between the them.
"There are also clear downside risks from weaker domestic demand in the Central and Eastern Europe sub-region particularly in the Southern Europe, relating in the near term to devastating floods (especially in Serbia and Bosnia and Herzegovina) and in the medium term to still high unemployment, high private sector debt, and the slow recovery in bank lending amid high (and in some cases rising) nonperforming loans.