Disagreements With serbia Darkening political outlook taBle: Kosovo � Political overview -- Long-term political outlook -- political Future Far From certain Despite serb agreement chapter -.-: economic outlook � Kosovo -- economic activity -- tensions in the north Likely to Weigh on taBle: Kosovo � econoMic -- chapter -.-: ---Year Forecast � -- the Kosovar economy to ---- -- economy to remain Least Developed in region taBle: Kosovo � lonG-terM MacroeconoMic forecasts -- chapter -: BMi Global assumptions -- Global outlook -- chinese economy under taBle: GloBal -- taBle: develoPed states, real GdP GrowtH, -- taBle: BMi versus BlooMBerG consensus real GdP GrowtH forecasts, -- taBle: eMerGinG MarKets, real GdP GrowtH, -- - Business Monitor International Ltd www serBia, MonteneGro anD KosoVo Q- ---- BMi ratings � Brief Methodology composite rating < ALACRA META ABSTRACT>The composite rating is an unweighted geometric mean of the short-term political and short-term economy ratings, allowing a ranking of all countries in BMI s emerging markets universe. political ratings The political ratings are an indicator of political stability, seen as a pre-requisite for a stable economy and business environment. ...Factors in the long-term rating include GDP growth, unemployment, inflation, real interest rates, exchange rates, the fiscal balance, the current account balance and external debt. A number of other structural factors are also thrown into the equation, including dependence on the primary sector, reliance on commodity imports, reliance on a single export sector and central bank independence. The factors included in the short-term rating are a subset of those in the long-term rating. ...While areas such as competitiveness, finance, openness and environment comprise the bulk of the rating, there is also an important feed from the political and economy ratings. The factors considered include: the state of the national infrastructure, the education system, cronyism/ corruption, red tape, the legal framework, property rights, market access and the corporate tax regime.
...Unresolved regional tensions and a fractious domestic political envi- ronment are expected to continue to hang over Serbia s political risk profile over the long term. In turn, the country s EU accession pros- pects and economic growth profile could suffer as a result. ...We believe that Serbian growth will be driven to a large extent by the country s ability to attract much-needed foreign direct investment. From a fundamental perspective, Serbia s geographi- cal proximity to the EU and skilled labour force with wages that compare favourably to European averages are likely to prove attractive to foreign enterprises. However, policy uncertainty and political risk could dampen enthusiasm for investing in the country. ...However, policy uncertainty and political risk could dampen enthusiasm for investing in the country.
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