Although the effects of the global financial crisis of September 2008 and its subsequent economic downturn lingered into 2010, the majority of the Black Sea region experienced a recovery in output. Continuing a trend that began in many countries in the second half of 2009, real GDP growth in 2010 picked up pace and reached an estimated 3.8%. Most of the Black Sea region recorded positive growth, one year after having suffered sharp and sizeable contractions which had brought the previous period of robust development to a sudden halt. For the period from 2000-2008 as a whole, real GDP growth in the Black Sea region averaged 5.9% per annum, equivalent to cumulative growth of 68% in real terms. And between 2002-2008, all Black Sea countries posted positive growth, every year.

Figure 1 shows how the region recovered in 2010 after the sharp contraction in 2009, returning to positive growth- albeit at a lower level than that observed during most of the sustained period of high growth between 2000-2008. Several factors contributed to the rapid recovery. Part of the output decline in late 2008 and early 2009 was due to panic, and this resulted in overreactions with domestic demand collapsing suddenly and extensively. With stabilization of the situation, the recovery from the collapse appeared rapid as private domestic demand picked up. The same largely applies to external demand. For the region as a whole, exports declined approximately 32% in 2009 and then grew by 20% in 2010, a level about four-fifths of the peak 2008 level and on a par with 2007. A similar situation occurred with respect to imports, which shrank 34% in 2009 and then grew around 17% in 2010. This is further corroborated by the sharp drop in commodity prices that occurred as demand dropped, and then their recovery in late 2009 and throughout 2010 as demand returned.

 

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