The South East Europe economies, like most other economies in Central and Eastern Europe, will likely experience reduced capital inflows, because investors have become more riskaverse. Consequently, foreign investment may decline compared with pre-crisis levels, leading to lower economic growth compared with the growth rates experienced in the years leading up to the crisis.
In light of the above, there will be a need to formulate and implement economic policies geared toward developing alternative sources of growth – policies that will render the economies less vulnerable to external shocks and that will allow them to better navigate their way through shocks should they occur. One such source of growth concerns the tradedgoods sector.