let me quickly reflect on the state of play of these long - term determinants of growth. concerning labor, the region has been facing constant shrinking of working - age population - 0. 5 % on average, per year in the last nine years, mostly due to unfavorable demographics and emigration. if we take into account estimates that 1 / 3 of the emigration is high - skilled labor, then obviously, this is not only an issue of quantity, but quality as well. in this context, global competitiveness report points to a large human capital gap of the region with an index rank of 62. 2, compared to 16. 7 for eu15. the health crisis emphasized even more the long - standing and burning issues that need to be tackled such as increasing participation rates ( that currently hover around 54 % ), rising life expectancy, skill mismatches, and in particular digital skills and " jobs skills of tomorrow ", although given the structural nature of the problem it will continue to weigh on the medium - term growth dynamics. concerning capital stock, data reveals that the capital stock in the region constitutes only one third ( 35 % ) of the capital stock in the countries of the european union. this calls for raising investment ratio and closing investment gaps. these gaps are particularly wide in infrastructure, looking at the average rank of 70. 5 for the region compared to 16. 7 for eu152. however, there is also a great scope for improvements in ict infrastructure, as a cornerstone of the new economy, in order to accelerate digital transformation of the economies. as for productivity, it remains low, about 1 / 3 of the eu average. in the last five years before pandemics, the average gdp growth of the region was 3 %, with tfp 2 / 3 bis - central bankers'speeches contribution of merely 0. 3 p. p. to increase productivity, the region must tackle structural and institutional obstacles that inhibit efficient allocation of resources. the evidence suggests that institutional reforms in emerging economies are associated with about 1 p. p. a year higher total factor productivity growth compared to " normal " years3. so far, fdis in the tradable sectors are one of the traditional venues that increase productivity that implies not only tapping additional external sources for growth financing, amidst low domestic savings, but also transfer of know - how and technologies. however, pandemics led to significant deceleration of fdis and trade flows, flagging up many vuln

anita angelovska bezhoska : address – balkan business week address by ms anita angelovska bezhoska, governor of the national bank of the republic of north macedonia, at the balkan business week, skopje, 7 june 2021. * * * dear all, ladies and gentlemen, the world economy has been faced with one of the most severe threats ever – a pandemic capable of bringing societies to their knees by threatening their livelihoods and wellbeing. western balkan countries, as small and open economies, were not shielded from this global shock, but were caught on a strong footing, amidst solid economic fundamentals and absence of significant disequilibria mirrored in solid growth pattern and moderate inflation. despite this favourable initial condition, the magnitude of the gdp adjustment was immense, with an average contraction of 6. 4 % in 2020, which is three times stronger compared to the global financial crisis. although it is a common global shock that in a synchronized manner affects all economies, the scrutiny of data reveals notable differences in economic losses, which to a great extent can be attributed to the different sectoral composition of the economies, their pre - crisis vulnerabilities and availability of policy space for reaction to the crisis. the dispersion of growth outcomes ranges from - 1 % ( serbia ) to - 15 % ( montenegro ) 1. the recession was particularly severe in countries that rely more heavily on services, especially those largely dependent on social interaction, as well as countries with industries closely tied to the european production chains. yet, according to imf estimates, the shock intensity would have been three times higher without unprecedented monetary and fiscal policy support, both in terms of speed and scale, preventing a more devastating outcome and long - term scarring to the economies. given the lessons learned from the global financial crisis, that is recognizing the risk of self - fulfilling cycles, central banks this time responded quickly, providing ultra - accommodative support such as policy rate cuts from already historically low levels, regulatory flexibility to prevent credit crunch and some of them even experimented with non - conventional tools. in this crisis episode, monetary policy was not perceived as " the only game in town " and since the very beginning, it was coupled with unprecedented fiscal stimulus. average fiscal stimulus in the region amounted around 6 % of gdp, which was twice as low as the global fiscal stimulus, but still on a comparable level with middle - income economies. consequently, the pre - pandemic fiscal consolidation