Growth in the six South East Europeancountries (SEE6) rebounded to 2.1 percent in 2015, asinvestment revived. The SEE6 region is not only growing butalso rebalancing to more durable sources of growth. Whilehigher growth in 2015 brought new jobs in the privatesector, and helped poverty reduction to resume, unemploymentis still entrenched. In 2015, fiscal deficits continued tonarrow in all SEE6 countries except Montenegro. Withinflation at historic lows, accommodative monetary policysupported growth, and credit to the economy slowly began togrow. The near-term baseline outlook for the region ispositive. Fiscal and current account deficits must declinefurther to support growth. Sustaining the nascentrebalancing requires unlocking the growth potential of theSEE6 economics by reversing productivity dynamics that havebeen deteriorating since 2008. The agenda for reducing thestructural rigidities that impede growth is broad based andcentered on five pillars: eliminate disincentives andbarriers to formal; employment; improve the business climateand governance; reduce the size of government whileimproving quality of service delivery; deepen trade andfinancial integration; and ensure that natural resource useis sustainable.
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