Skopje, 24 October 2022 

Governor Anita Angelovska Bezhoska moderated one of three panel discussions at the Conference of the Central Bank of Poland, while the other two panel discussions were moderated by the Governor of the Central Bank of Austria and the Governor of the Central Bank of Lithuania. The Conference was dedicated to the process of convergence in the of Central and Southeastern European region. "There is no doubt that in the last three decades there has been great progress in the transformation of the economies of the countries of Central and Southeastern Europe and in their convergence towards the advanced EU economies, with the speed varyingt for different countries at different times. However, the progress is the least in the region of the Western Balkans, where the income in relation to the average income in the EU-15 is still less than 40%, on average," said Governor Angelovska Bezhoska, opening the panel discussion.

"Before the pandemic, a decelerated convergence was registered, with the risks of a further slowdown being highlighted by the shocks we are currently facing," the Governor said, adding that the pandemic and other consecutive shocks hit all economies, but not with the same intensity due to the different structures and policy differences. This accentuates the risk of further divergence rather than convergence, i.e. the risk of increasing the gap in economic prosperity. This risk is even more pronounced for countries that are not members of the European Union because they do not have access to the EU funds that are intended for this (for example the Pandemic Recovery Fund which finances investments and structural reforms). The slowdown in convergence is the result of both cyclical and structural factors, and is also reflected in the region's reduced growth potential. The reduced growth potential is explained by the three long-term factors of growth: human capital, physical capital and productivity.

Speaking about the countries' labor force, Angelovska Bezhoska emphasized that the region is facing a decline in the rate of the working population, which is a reflection of unfavorable demographic trends, but also of emigration. Given the estimates that in some countries about 1/3 of emigration are highly qualified persons, these movements have a negative impact not only on the volume, but also on the quality of the labor force. Hence, structural reforms are crucial for raising the potential for growth and for a faster approach to the income of developed EU economies.

Cornel Ban, Associate Professor of International Political Economy at the Copenhagen Business School, David Marsh, Chairman of the Official Forum of Monetary and Financial Institutions (OMFIF) and Rainer Martin, Head of the Research Department at the National Bank of Slovakia, discussed the prospects for permanent convergence in Central Europe, for the aging of the population and the growing labor costs, about economic growth models and financial systems that are a significant support for encouraging economic growth, as well as about the design of appropriate macroeconomic policies in conditions of high uncertainty.