How are Firms in Eastern and Central Europe Reacting to the Financial Crisis?
Topic: Financial Crisis
Authors: Rita Ramalho, Jorge Rodríguez-Meza, Judy Yang
Since late 2008, countries around the world have been affected by the global economic slowdown. The Financial Crisis Survey measures the effects of this crisis on 1,686 firms in six countries in Eastern Europe and Central Asia: Bulgaria, Hungary, Latvia, Lithuania, Romania, and Turkey. Survey data show that in these countries, the major effect of the crisis is a drop in demand. It is not a financial crisis - it is a demand crisis. Sales and capacity utilization decreased in all six countries. Accompanying a drop in demand is a drop in employment, which affects mostly permanent employees.