Emerging Europe (Includes Albania, Bosnia and Herzegovina, Bulgaria, Croatia, Hungary, Kosovo, Lithuania, Macedonia, Montenegro, Poland, Romania, and Serbia) is not yet fully back on its feet in the wake of the global financial crisis, owing to a shaky recovery on the continent and slowing growth in Russia. The area’s economy grew 2.7% in 2014, down slightly from last year because of lagging capital inflows, geopolitical risks, and structural rigidities. Declining world food and energy prices and low imported inflation from the Eurozone have continued to pull down prices across most of Central, Eastern, and Southeastern Europe. The regional inflation average remained at a subdued 4% in 2014. By comparison, in Russia and the rest of the Commonwealth of Independent States, steep domestic food prices and exchange rate depreciation have kept inflation high.
The region’s MDG target of access to water has been reached, and education, health, and reduction in gender inequality are all on track to achieving their goals as the 2015 deadline approaches. Yet high unemployment, rising income inequality, and slow rehabilitation following the financial crisis spell uneven progress among several countries in meeting their MDG objectives. Despite efforts in Emerging Europe and the Central Asia region, around 36% of the population (about 160 million) is still considered poor or at risk of poverty, living on less than $5 per day. In some countries, reducing maternal mortality and providing proper access to improved sanitation are still goals in progress.
Through partnerships with six countries in the region, OFID is actively engaged in helping Emerging Europe achieve its development goals. In 2014, these efforts continued with the approval of a US$5.4m public sector loan to Bosnia and Herzegovina for a project to help 20,000 smallholders transition from subsistence to commercial farming and diversify into off-farm activities.