FRANKFURT: Current economic trends in Western and Eastern Europe are back to a familiar pattern of the past fifteen years: divergence. In the West, the picture is of economic pessimism and downward forecasts. Even if hopes for a recovery later this year materialize, GDP growth in EU countries will be down a third on last year. In the East, a growing number of economies -- exceptions come in the CIS, though Russia is starting to grow -- are expanding fast. Countries that tackled reforms in earnest should grow 5% or more for the next few years at least.
Should we believe such projections of opposing developments in the West and East? After all, the factors which once explained why economies often developed out of step no longer exist. The countries of Eastern Europe no longer function in isolation from the world market. Both the transition from a planned economy to a market economy and re-orientation towards the West are in advanced stages. Association agreements with the EU have improved Eastern countries' market access. This helped vastly increase their exports to the EU as a proportion of total exports. The figure is currently around 50%, and growing. So slower growth in demand in what has become by far the most important export market has significant potential to disrupt the progress of Eastern European economies.
Nonetheless, the basis for an upturn has broadened in many of these countries. Exports, traditional catalysts for recovery, have driven the restructuring process so far that both investment and private consumption now contribute increasingly to economic growth in a number of countries. More important: progress with reform has seen production bases expanded and diversified to an extent that allows a greater division of labor between Eastern and Western Europe.
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While China was an early mover in regulating generative AI, it is also highly supportive of the technology and the companies developing it. Chinese AI firms might even have a competitive advantage over their American and European counterparts, which are facing strong regulatory headwinds and proliferating legal challenges.
thinks the rules governing generative artificial intelligence give domestic firms a competitive advantage.
After years in the political wilderness, the UK Labour Party is now far ahead in opinion polls, with sensible plans for improving the country's economic performance. But to translate promises into results, any future government will have to do something about the elephant in the room: chronic under-investment.
explains what it will take for any political party to restore hope in the country's long-term economic future.
FRANKFURT: Current economic trends in Western and Eastern Europe are back to a familiar pattern of the past fifteen years: divergence. In the West, the picture is of economic pessimism and downward forecasts. Even if hopes for a recovery later this year materialize, GDP growth in EU countries will be down a third on last year. In the East, a growing number of economies -- exceptions come in the CIS, though Russia is starting to grow -- are expanding fast. Countries that tackled reforms in earnest should grow 5% or more for the next few years at least.
Should we believe such projections of opposing developments in the West and East? After all, the factors which once explained why economies often developed out of step no longer exist. The countries of Eastern Europe no longer function in isolation from the world market. Both the transition from a planned economy to a market economy and re-orientation towards the West are in advanced stages. Association agreements with the EU have improved Eastern countries' market access. This helped vastly increase their exports to the EU as a proportion of total exports. The figure is currently around 50%, and growing. So slower growth in demand in what has become by far the most important export market has significant potential to disrupt the progress of Eastern European economies.
Nonetheless, the basis for an upturn has broadened in many of these countries. Exports, traditional catalysts for recovery, have driven the restructuring process so far that both investment and private consumption now contribute increasingly to economic growth in a number of countries. More important: progress with reform has seen production bases expanded and diversified to an extent that allows a greater division of labor between Eastern and Western Europe.
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