TAILIEUCHUNG - The World Bank EU10 Regular Economic Report

The equilibrium of supply and demand balances the quantity demanded and the quantity supplied, so that there is no excess of either. Would it be desirable, from a social perspective, to force more trade, or to restrain trade below this level? There are circumstances where the equilibrium level of trade has harmful consequences, and such circumstances are considered in Chapter 6. However, provided that the only people affected by a transaction are the buyer and seller, the equilibrium of supply and demand maximizes the total gains from trade. This proposition is quite easy to. | The World Bank EU10 Regular Economic Report Main Report Safeguarding Recovery July 2010 Focus Notes Absorption of EU Funds Invitation Paper by Zsolt Darvas Research Fellow at Bruegel Institute Global Financial Crisis and Growth Prospects This report is prepared by a team led by Kaspar Richter krichter@ and including Stella Ilieva Leszek Kạsek Ewa Korczyc Matija Laco Sanja Madzarevic-Sujster Catalin Pauna Marcin Piạtkowski Stanislav Polak Lazar Seskovic and Emilia Skrok. The team is very grateful for the excellent inputs from the World Bank Global Prospect Group coordinated by Annette De Kleine. EU10 refers to Bulgaria the Czech Republic Estonia Hungary Latvia Lithuania Poland Romania the Slovak Republic and Slovenia. EU10 1 includes Croatia. 1 EU10 July 2010 Summary of Main Report The EU10 region has returned to growth in 2010 for the first time since the start of the global financial crisis in late 2008. But volatile financial markets fiscal pressures and high unemployment cast a shadow on future prospects. Bolstering financial sector stability shoring up fiscal sustainability and tackling structural unemployment are essential for safeguarding the recovery. The EU10 region s growth in the first quarter of 2010 was helped by the upturn in global trade a low interest rate environment EU funds and restocking. Industrial production retail sales and economic sentiment indicate a continued recovery in the second quarter of 2010. Low current account deficits and moderate inflation bolster economic stability. Nevertheless the economic upturn is weak. It will take until the second half of next year before real output in the EU10 region regains its pre-crisis level. Private consumption and private investment are likely to add to growth only from 2011 onwards. And post-crisis growth is likely to stay below pre-crisis growth in view of reduced capital flows restrained credit growth and structural adjustments in the economy. The pace of the recovery also differs .

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