Eastern Europe bucks the global trend

The EBRD predicts 4.3% growth for the region this year

The European Bank of Reconstruction and Development (EBRD) has forecast a third year of strong growth for economies in Central and Eastern Europe.

In its latest report on the economic progress of the region, the EBRD has predicted that the region will expand by 4.3% this year, following 5.5% growth in 2000.

"Our region is less directly exposed to that part of the industrialised world that will slow down most, that is the US economy," the EBRD's chief economist Professor Willem Buiter told the BBC.

Reforms to allow countries in the region to meet condition for EU accession were also cited as reasons for the resilience of the economies.

Slowing growth

But the report warned that the economies were not immune to the effects of the global economic slowdown.

"When the world economy slows down as it is now, no region is an island," Professor Buiter said.

Professor Buiter predicted growth would slow next year to about 3%.

If there is an extended worldwide slump the outlook will be further weakened, he said.

Key economy

The Russian economy, of key importance in the region, relies heavily on oil production and exports.

Professor Buiter said that while the country was well prepared to cope with the current low oil price, the slide would have an effect.

"The government has exercised great fiscal prudence in this past year or two, built up very large foreign exchange reserves, paid off foreign debt," he said.

"It is therefore quite well situated to survive even a rather low oil price, although of course it will hurt."