The document discusses economic challenges facing countries in the Black Sea region. Export-led growth has been unimpressive due to weaknesses in the Eurozone and Russia. Tighter access to external borrowing is limiting investment and consumer spending growth. A shift to investment-based growth is also not occurring due to a poor investment climate, especially in Russia and Ukraine. Higher private domestic and foreign investment is needed in key sectors to unlock new sources of economic growth.

1. New economic realities: a quest for
sustainable sources of economic
development of the Black Sea region
Oleg Ustenko
Executive Director, The Bleyzer Foundation
TURNING TRANSITION INTO PROSPERITY
October 24-25, 2013, Crimea
І V INTERNATIONAL BLACK SEA ECONOMIC FOR

2. a quest for sustainable development…
• Export-led recovery remains unimpressive on Eurozone
weaknesses and a slower growth in Russia.
• Tighter access to external borrowing limits the growth of
investment and consumer spending, especially in smaller
countries.
• Consumer led recovery looks particularly shaky in Ukraine on
concerns of weak public finances, slowing exports and surging
external funding needs.
• Credit growth to private sector is sluggish, especially in Ukraine,
Romania and Bulgaria.
• A shift toward investment-based growth is not happening on
poor investment climate, especially in Russia and Ukraine.
• Higher private domestic and foreign investments are essential
to unlock potential sources of economic growth in energy,
infrastructure, transportation and agriculture.
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3. Economic Growth
% annual change
Source: IMF
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4. Per capita GDP
based on PPP, thousand current international dollars
Source: IMF
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5. Sources of Economic Growth
contributions to GDP growth, percentage points
UKRAINE
Source: State Statistics Committee of Ukraine
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6. Sources of Economic Growth
contributions to GDP growth, percentage points
RUSSIA
Source: World Bank
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7. Sources of Economic Growth
contributions to GDP growth, percentage points
TURKEY
Source: World Bank, OECD
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8. Sources of Economic Growth
contributions to GDP growth, percentage points
BULGARIA
Source: World Bank, OECD
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9. Sources of Economic Growth
contributions to GDP growth, percentage points
ROMANIA
Source: World Bank, OECD
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10. Sources of Economic Growth
contributions to GDP growth, percentage points
GEORGIA
Source: World Bank, Asian Development Bank, TBF
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11. The End of The Credit Boom
credit to private sector, % annual change
Source: IMF, World Bank
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12. Macroeconomic vulnerabilities
consumer prices, % annual change
Source: IMF
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13. Macroeconomic vulnerabilities
current account, % of GDP
Source: IMF
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14. Macroeconomic vulnerabilities
general government revenue minus expenditure, % of GDP
Source: IMF
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15. Macroeconomic vulnerabilities
gross government debt, % of GDP
Source: IMF
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16. Macroeconomic vulnerabilities
Credit Default Swaps, percentage points
Source: Deutsche Bank AG
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17. Investment Climate
Ease of doing
business rank
Index of
Economic
Freedom
Global
Competitiveness
Index
Government
effectiveness,
percentile rank
(higher number better
performance)
Corruption
Perception Index
Source: World Bank, WEF, Transparency International, The Heritage Foundation
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