# **Figure 9. Investment growth slowdown in Europe and Central Asia, 2010-15**

_Regional investment growth declined from 10.2 percent in 2011 to 0.4 percent in 2015. Initially, the decline was concentrated in the western part of the region and reflected spillovers from the Euro Area crisis. The recovery of investment growth in the western part of the region in 2014-15 was outweighed by a contraction in oil-exporting economies in the eastern part of the region, which suffered a major terms-of-trade shock after the oil price drop. Recession in Russia was exacerbated by international sanctions_ .

## **A. Investment growth by region**

## **B. Five-year-ahead investment growth expectations**

<!-- Start of picture text --> 20Percent 1995-2008 avg 2003-08 avg Percent9 Commodity exportersCommodity importers<br>15 8<br>10 7<br>5 6<br>0 5<br>-5 4<br>3<br>2<br>Western Eastern Overall<br>1<br>Region Region<br>0<br>Europe and Central Asia EMDE 2010 2011 2012 2013 2014 2015<br>C. EMDEs with weak investment growth D. FDI inflows<br>Percent of ECA economies Percent of GDP<br>75 Below long-term average Contracting 19 2015<br>Difference from long-term average<br>14<br>50<br>9<br>4<br>25<br>-1<br>0 -6<br>2010 2011 2012 2013 2014 2015<br>E. Terms of trade change F. Political stability<br>Percent ICRG index (0-100, 100=best)<br>30 Commodity exporters 68<br>20 Commodity importers 66<br>64<br>10 62<br>0 60<br>58<br>-10<br>56 Commodity exporters<br>-20 54<br>52 Commodity importers<br>-30<br>50<br>2010 2011 2012 2013 2014 2015<br>2010 2011 2012 2013 2014 2015<br>201020112012201320142015201020112012201320142015201020112012201320142015201020112012201320142015<br>MNE TKM GEO ALB AZE SRB KSV BGR MDA UKR TJK BLR TUR KAZ ROM MKD ARM UZB BIH RUS<br><!-- End of picture text --> Sources: Consensus Economics, EBRD (2015a), Eurostat, Haver Analytics, PRS Group, World Bank. A.C. Investment growth rates are weighted averages of gross fixed capital formation growth rates in the public and private sectors, respectively, in constant 2005 U.S. dollars.

A. The eastern part of the region comprises Eastern Europe (Belarus, Moldova, and Ukraine), South Caucasus (Armenia, Azerbaijan and Georgia), Central Asia (Kazakhstan, Kyrgyz Republic, Tajikistan, Turkmenistan, and Uzbekistan) and Russia. The western part of the region includes Central Europe (Bulgaria, Croatia, Hungary, Poland and Romania) and the Western Balkans (Albania, Bosnia and Herzegovina, Kosovo, FYR Macedonia, Montenegro, and Serbia), and Turkey.

B. Five-year ahead consensus forecasts as of the latest available month in the year denoted.

C. Share of ECA economies with investment growth below its long-term average or negative.

D. MNE = Montenegro, TKM = Turkmenistan, GEO = Georgia, ALB = Albania, AZE = Azerbaijan, SRB = Serbia, KSV = Kosovo, BGR = Bulgaria, MDA = Moldova, Republic of, UKR = Ukraine, TJK = Tajikistan, BLR = Belarus, TUR = Turkey, KAZ = Kazakhstan, ROM = Romania, MKD = FYR Macedonia, ARM = Armenia, UZB = Uzbekistan, BIH = Bosnia and Herzegovina, RUS = Russia.

E. Investment-weighted average. A decline denotes a terms of trade deterioration.

F. Investment-weighted average. A higher index denotes greater political stability.

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