In addition, weak employment conditions, lower public sector wages, fiscal tightening, sluggish credit growth and private sector indebtedness continue to restrain domestic consumption and investment.
As regards the sectoral allocation of lending, consumer credit growth was particularly strong at 17 per cent, followed by lending to commerce(13 per cent) and industry(10 per cent).
Examining the data further, Fatas found that low unemployment doesn't necessarily signal a recession, but is a contributor to financial imbalances: credit growth.
All countries except Albania registered a decline in GDP in 2009 on the back of declining export volumes, lower commodity prices, an abrupt slowdown in credit growth and shrinking remittances.
Key elements are: continuing to rein in credit growth, accelerating rebalancing efforts, increasing the role of market forces, fostering openness, and modernizing policy frameworks.
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