Business constraints are decreasing in central and eastern Europe while economic growth remains strong at 5.3%, says a new EBRD/World Bank report.
Against the backdrop of strong economic growth, the countries of central and eastern Europe have over the past years managed to reduce business constraints on companies and have showed improvements in regulation, taxation and fighting crime, says a new Transition Report released jointly by the European Bank for Reconstruction and Development (EBRD) and the World Bank. At the same time, the so-called transition countries remain saddled with weak institutions, red tape and poor access to finance, and corruption also remains a crime to be reckoned with.
Overall, the report finds that the standard of the business environment in the region has not yet reached that of the mature market economies. "One notable exception," says the report, "is labour constraints such as skills shortages and labour market regulation, which are considered more of an obstacle in mature market economies than in most transition countries".
Across the transition countries, economic growth slowed from a record 6.6% in 2004 to 5.3% in 2005, but the region is still outperforming the eurozone.
The authors of the report polled over 9,500 firms in the region and contrasted the findings with those from a similar survey completed in 2002.
By: N. Peter Kramer
