Warsaw--Growth in emerging and developing Europe is expected to rise slightly this year thanks to lower oil prices but subdued external demand is putting the brakes on a stronger expansion, the International Monetary Fund said Tuesday.
The IMF expects the region to grow 2.9 percent this year, up from the 2.8 percent clocked last year, and foresees a solid 3.2 percent expansion in 2016.
"Lower oil prices and the gradual recovery in the euro area are expected to provide a lift to the region, offsetting the effects of the contraction in Russia," the IMF said in its spring World Economic Outlook report.
"External demand remains subdued, and high corporate debt continues to weigh on investment."
The IMF's "emerging and developing Europe" category refers to five European Union members -- Bulgaria, Croatia, Hungary, Poland, Romania -- plus non-members Serbia and Turkey.
It considers the nearby Czech Republic and eurozone members Estonia, Latvia, Lithuania, Slovakia and Slovenia part of "advanced Europe".
Growth in Central European heavyweight Poland is expected to top the region with 3.5 percent this year -- "supported by domestic demand and improved conditions with trading partners" -- and remain steady in 2016.
Poland is followed closely by Turkey, where a strong recovery has it on track to grow by 3.1 percent in 2015, up from 2.9 percent last year "as private consumption gets a lift from lower energy prices".
The IMF is forecasting 3.6 percent growth next year for Turkey, where inflation has remained high.
Hungary, meanwhile, is forecast to decline to a 2.7 percent expansion this year and slip further to 2.3 percent in 2016 due to "lower investment growth and less supportive fiscal conditions".
Both Hungary and Poland have been hit by deflation spurred on by low euro area inflation.
A 2.9 percent expansion is forecast for Romania in 2016, up from 2.7 percent this year.
AFP
