Despite the slowdown, the Black Sea countries managed to maintain a milestone, achieving positive growth in each and every country for the seventh consecutive year (dating back to 2002). In most cases, the rate of growth was diminished relative to immediately previous years, and for all countries growth rates fell to near zero or even turned negative in the final quarter of the year as the financial crisis impacted the Region’s economies while also evolving into a global economic recession. Whereas three Black Sea countries achieved double digit real GDP growth in 2007, only one just managed to repeat the feat in 2008.

Thus, while the trend of growth from 2000-2007 continued for the first three quarters of 2008, with regional output increasing at an average real rate in excess of 6.0%, the sharp slowdown in the last quarter lowered outturns considerably- to an estimated 4.3% for the year (see figure 1).

Figure1

Despite the sharp reduction in growth in the greater Black Sea Region, its overall performance for 2008 remained among the higher rates globally (see figure 2). Black Sea regional growth was four times higher than that of the 27 European Union countries (including Bulgaria, Greece, and Romania) which as a whole experienced estimated growth of 1.0%, while the Eurozone’s 15 members (including Greece) experienced growth of 1.1%. This is significant, because in recent years the EU-27 has grown significantly as a trading partner and a source of financing and investment for the Black Sea Region. Regional growth also outpaced that of neighboring regions such as the 2004 EU Entrants from Central-Eastern Europe and the Baltics , who are often used as comparators since, like most Black Sea countries, they underwent a transition process from centrally planned to market oriented economies. Overall, the Black Sea Region grew at nearly twice the rate of growth of the World Economy, although it lagged somewhat relative to other developing regions, which enjoyed estimated growth of 6.3%.

Figure 2