Transcript January 2008 World Bank EU8+2 Regular Economic Report Special

World Bank EU8+2
Regular Economic Report
Special Topic on Satisfaction with Life and Public
Service Delivery
January 2008
January 2008
The World Bank’s Regular Economic
Reports (May, September, January)
examine recent economic developments
and prospects in the NMS. Each edition
includes a Special Topic of current policy
relevance in the region. This one focuses
on the satisfaction with life and public
services .
Message 1:
The economic outlook for the EU8+2
in 2008 and 2009 is generally
positive, however, as in the advanced
economies, the baseline scenario is
now subject to greater downside risk.
GDP growth rates peaked in many countries
in the first half of 2007.
This deceleration is likely to continue though
2008 but growth could still average as much
as 5%.
The slowdown is most pronounced in the
Baltics.
Growth should gradually resume in Hungary.
Romania and Bulgaria may stay at or near
current rates of growth.
The rates of growth were unsustainable in
some countries.
Message 2:
While globalization offers the
prospect of higher sustained growth,
it also carries risks related to
turbulence in external markets.
Potential for more severe global
contraction affecting export markets in EU.
Risk of cutoff of financing for current
account deficits which are large in the
Baltics and are continuing to grow in
Romania and Bulgaria.
Significant portion of debt is denominated
in, or linked to, foreign currency.
Message 3:
The disturbances originating in the
sub-prime mortgage market in the
US have widened to affect other
countries and other markets, and
prospects for US growth have
become less clear, but several
factors serve to dampen the effect
on the EU8+2.
EU8+2 economies are linked more directly
to the EU than the US.
Banks in the region are not as exposed to
the sub prime market.
Domestic private demand (not net external
demand) has been the main engine of
growth.
While credit has increased rapidly, private
borrowers were under-leveraged a the
outset.
Message 4:
Inflation is on the rise throughout the
region
Food and oil prices are a main factor.
Changes may not be temporary
Credit expansion slowing but strong.
Currency appreciation effects have
reversed in some countries.
Wage growth easing but still strong
Unit labor costs continue to rise.
Convergence dynamics create strong
price pressures for non-traded goods.
Message 5:
The region faces some important
macroeconomic challenges.
It is difficult for fixed exchange rate
countries to use monetary policy to fight
inflation and contain CADs.
Monetary policy is less effective when a
large portion of debt is in foreign currency.
Authorities must rely more on fiscal policy
to control demand but have been reluctant
to take stronger measures despite buoyant
revenues which may soften next year.
Special topic
Satisfaction with Life
and Public Service Delivery
in EU8+2 Countries
EBRD-World Bank Life in Transition
Survey
1. Satisfaction with life and surroundings
2. Satisfaction with public service delivery
3. Other findings
• Priorities for public investments
• Democracy
• Economic system
• Corruption
• Income redistribution
Overall satisfaction with life is high..
All things considered, I am satisfied with my life right now
Slovenia
Estonia
Slovakia
Croatia
Latvia
Czech Republic
Lithuania
Poland
Romania
Bulgaria
Hungary
0
20
40
60
Percent of respondents
80
Strongly disagree
Disagree
Neither
Agree
Strongly agree
100
..even if that with the economy is not
Economic situation is better today than around 1989
Estonia
Lithuania
Czech Republic
Latvia
Poland
Slovenia
Slovakia
Romania
Bulgaria
Croatia
Hungary
0
20
40
60
Percent of respondents
80
Strongly disagree
Disagree
Neither
Agree
Strongly agree
100
Mixed responses about impact of transition
on their lives …
My household lives better now than around 1989
Estonia
Lithuania
Slovenia
Czech Republic
Poland
Latvia
Slovakia
Romania
Bulgaria
Croatia
Hungary
0
20
40
60
Percent of respondents
80
Strongly disagree
Disagree
Neither
Agree
Strongly agree
100
.. relative to parents ..
I have done better in life than my parents
Slovakia
Estonia
Slovenia
Lithuania
Romania
Latvia
Croatia
Czech Republic
Poland
Bulgaria
Hungary
0
20
40
60
Percent of respondents
80
100
..with optimism about the future for children
Children born now will have a better life than my generation
Lithuania
Latvia
Estonia
Slovakia
Poland
Czech Republic
Croatia
Romania
Bulgaria
Slovenia
Hungary
0
20
40
60
Percent of respondents
80
Strongly disagree
Disagree
Neither
Agree
Strongly agree
100
2. Satisfaction with Public Service Delivery
•
•
•
•
•
•
•
•
Public education
Request for official documents
Public health system
Road police
Social security benefits
Courts
Other police
Unemployment benefits
Generally high satisfaction levels…
Satisfaction with Public Service Delivery
Public education
Request official documents
Public health system
Road Police
Social security benefits
Courts
Other police
Unemployment benefits
0
20
40
60
Percent of respondents
80
Very unsatisfied
Unsatisfied
Neither
Satisfied
Very satisfied
100
... though some variation by country
Public Health System
Slovenia
Croatia
Estonia
Bulgaria
Czech Republic
Slovakia
Lithuania
Latvia
Hungary
Poland
Romania
0
20
40
60
Percent of respondents
80
Very unsatisfied
Unsatisfied
Neither
Satisfied
Very satisfied
100
Public Education (university, college, vocational)
Hungary
Estonia
Latvia
Slovenia
Czech Republic
Bulgaria
Poland
Croatia
Lithuania
Romania
Slovakia
0
20
40
60
Percent of respondents
80
Very unsatisfied
Unsatisfied
Neither
Satisfied
Very satisfied
100
3. Other Key Findings
•
•
•
•
•
Priorities for public investment
Democracy
Economic system
Corruption
Income redistribution
Support for healthcare is a priority
Which of these fields should be the first priority for extra government investment?
Other
Pensions
Education
Infrastructure
Housing
Healthcare
Healthcare
Bulgaria
Hungary
Slovakia
Lithuania
Romania
Czech Republic
Poland
Estonia
Latvia
Slovenia
Croatia
0
10
20
30
Percent of respondents
40
50
Education
Croatia
Latvia
Slovenia
Slovakia
Estonia
Czech Republic
Lithuania
Bulgaria
Poland
Romania
Hungary
0
10
20
30
Percent of respondents
40
Pensions
Romania
Poland
Latvia
Croatia
Bulgaria
Estonia
Lithuania
Czech Republic
Hungary
Slovenia
Slovakia
0
5
10
15
Percent of respondents
20
Strong public support for democracy
Attitudes Towards Type of Political System
Slovakia
Slovenia
Hungary
Estonia
Czech Republic
Latvia
Croatia
Lithuania
Poland
Romania
Bulgaria
0
20
40
60
80
100
Percent of respondents
Democracy preferable to any other system
Doesn't matter for people like me
Authoritarian government may be preferable under some circumstances
Attitudes towards type of economic
system
Attitudes Towards Type of Economic System
Slovenia
Estonia
Slovakia
Czech Republic
Romania
Lithuania
Poland
Latvia
Hungary
Bulgaria
Croatia
0
20
40
60
80
Percent of respondents
Market economy preferable to any other system
Doesn't matter for people like me
Planned economy may be preferable under some circumstances
100
Perceptions regarding corruption
There is less corruption now than around 1989
Estonia
Slovenia
Romania
Poland
Slovakia
Latvia
Lithuania
Czech Republic
Hungary
Bulgaria
Croatia
0
20
40
60
Percent of respondents
80
Strongly disagree
Disagree
Neither
Agree
Strongly agree
100
Strong Support for Redistribution
Reducing income gap: share of population that would like the state to be:
Not involved
Moderately involved
20%
40%
Strongly involved
Slovenia
Lithuania
Latvia
Hungary
Estonia
Slovakia
Poland
Czech Republic
0%
10%
30%
50%
60%
70%
80%
90%
100%