Friday, May 30, 2014

Recent floods will hit Balkan economies

Reuters: Recent devastating floods in the Balkans could cost Bosnia and Serbia up to 10 percent of their economic output, the European Bank for Reconstruction and Development said on Thursday. The lender gave a preliminary estimate for damages from floods in Serbia at between 1.5 and 2 billion euros ($2.72 billion), or about 7 percent of gross domestic product. It said the damage in Bosnia could amount to 1.3 billion euros, or 10 percent of GDP.

More than 65 people were killed by flooding in Serbia, Bosnia and Croatia earlier this month after the heaviest rainfall in more than a century caused rivers to burst their banks, sweeping away roads, bridges and homes.

The agricultural sector, which accounts for 1 percent of national output in Serbia and 6 percent of Bosnia's economy, had been hit hardest by the floods, the EBRD said, adding that lower yields could lead to higher food prices, fuelling inflation.

The bank said its growth forecasts for the two countries will need to be revised downwards. The bank currently forecasts 2014 growth of 1.8 percent for Bosnia and 1 percent in Serbia.

Serbia's Prime Minister Aleksandar Vucic told parliament on Thursday the government plans to finish reconstruction of major roads affected by the flooding within five months. "For me the easiest thing would be to say we will fix every house, but I don't know where we can find the money," Vucic added. "The power sector is my biggest concern."...

Bosnian flood damage earlier in May 2014, shot by Dalibor Platenik - Dali, Wikimedia Commons,  under the Creative Commons Attribution 3.0 Unported license 

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