Monthly Report No. 3/2024

Chart of the Month Economic convergence of EU-CEE and EU candidate countries by Ambre Maucorps Opinion Corner Disinflation does not require positive interest rates by Leon Podkaminer In recent years, there has been no shortage of calls for a radical tightening of monetary policy in response to high inflation. However, both history and recent developments in the euro area countries cast doubt on the uniform wisdom of such a response, suggesting that inflation can moderate just as well if real interest rates are in negative territory. Inflation and the poor The case of North Macedonia by Branimir Jovanović We estimate that the number of people living in extreme poverty in North Macedonia rose by 21-43% between 2021 and 2023. Similarly, the number of people living in moderate poverty increased by between 21% and 28%. This massive rise in poverty levels can be attributed to the fact that price increases outpaced the growth in income for many people. Although this analysis specifically addresses North Macedonia, the findings are likely to hold for other countries where this has been the case. Job loss and labour-market transitions during the COVID-19 pandemic in Austria by Stefan Jestl and Maryna Tverdostup The COVID-19 pandemic had a profound and uneven impact on employment in Austria, with female workers, those born abroad and individuals with a lower level of education proving the most susceptible to the changes. Immigrant women and mothers who lost their job during the pandemic faced prolonged unemployment and a reduced chance of securing full-time work afterwards. Surprisingly, our data suggest that – unlike in other countries – poorly educated and younger workers in Austria do not face a severe disadvantage when re-entering the job market. Forecasts of main economic indicators for Central, East and Southeast Europe for 2024-2026