More than 731 million people living in 44 different countries are part of the economy of Europe. Though the wealth of the European nations vary widely, even the poorest countries of Europe are well above the poorest countries of the world. The poorest countries of Europe are usually those that were severely affected by the downfall of the Soviet Union. While most of the countries of Europe are very well-developed and have GDP per capita higher than the world average, a few nations still need to perform exceedingly well to catch up with these European leaders. Here, we present some of the poorest countries in Europe and the status of their economies.
10. Bulgaria - $9,267
Bulgaria is a country located in southeastern Europe. The nation shares its land borders with Romania, Serbia, Macedonia, Greece, and Turkey. The Black Sea lies to the east of the country. Bulgaria’s economy experienced a major setback in the 1990s after the loss of the Comecon and Soviet market. The attempts to establish a democratic government and a free market economy in the country further destabilized the economy of Bulgaria. The standard of living in the country reduced by 40% and began recovering only after 1998. By June 2004, the economy of Bulgaria had regained pre-in1989 levels. However, the Great Recession of 2008 struck the economy badly, and a 5.5% economic decline was experienced in 2009. Since then, however, the country has recovered better than most Balkan countries but still the growth of the economy of Bulgaria continues to be weak.
9. Montenegro - $8,652
Montenegro is a Southeastern European nation sharing its borders with Croatia, Bosnia and Herzegovina, Kosovo, Serbia, and Albania. It also has a coast on the Adriatic Sea. Montenegro’s GDP per capita was only 41% of the average of the European Union in 2010 according to Eurostat. The impact of the Yugoslav Wars and the decline of industry following the break-up of Yugoslavia accompanied with the loss of UN financial sanctions adversely affected the economy of Montenegro. In 2009, the nominal GDP of the country was $4.114 billion USD. The economy of Montenegro was in a steady state of growth until the global recession of 2008 that struck the country badly. The situation led to the contraction of the GDP of the country by 4%. However, things have improved in the past few years and the economy of Montenegro is gradually recovering.
8. Serbia - $7,243
Serbia is located at an intermediate position between Southeast and Central Europe. The landlocked nation shares its borders with Romania, Hungary, Macedonia, Bulgaria, Montenegro, Croatia, and Bosnia-Herzegovina. The economy of Serbia was severely affected by the global economic crisis of 2008. After experiencing eight years of strong economic growth, the country’s economy entered a period of recession in 2009. Negative growth rates of −3% in 2009 and −1.5% in 2012 resulted as a result of this economic crisis and Serbia’s public debt doubled in 4 years from 29.2% of GDP before the crisis to 63.8% of GDP after it.
7. Belarus - $6,306
Belarus is an Eastern European landlocked nation that is bordered by Poland, Ukraine, Lithuania, and Latvia. More than 40% of the land area of Belarus is covered by forests. Industries and manufacturing are the strongest economic sectors of the country. Belarus ranks 7th among the poorest countries in Europe. Like many other former Soviet republics, Belarus faced an economic crisis after the fall of the Soviet Union and the government of independent Belarus then adopted a way to overcome the crisis. Formerly, Belarus had a well-developed economy and one of the highest standards of living among the Soviet republics. However, between 1991 and 1995, a profound economic crisis gripped the entire country. Decrease in import, investment, and demand led to a drop in the industrial production in the country. It was not till 1996 that the GDP of the country began to recover.
6. North Macedonia - $6,100
North Macedonia is one of the poorest countries in Europe. The country earned its independence in 1991 as one of the successor states of the former Yugoslavia. Macedonia is a landlocked nation that is bordered by Serbia, Bulgaria, Greece, and Albania. Since independence, the country has undergone dramatic economic reform. The country has gradually improved its economy over the years with successful policies implemented by the government. Macedonia has an open economy where trade accounts for 90% of the GDP in recent years. However, in spite of the reforms, the country has a high unemployment rate of 27.3% as of 2015 and a high poverty rate. 72% of the people of the country have reported that they manage their living standards with difficulty.
5. Bosnia and Herzegovina - $5,674
Bosnia and Herzegovina is located in the Balkan Peninsula. The country is bordered by Serbia, Croatia, and Montenegro. It also shares a coastline with the Adriatic Sea. Bosnia faces the dual challenge of rebuilding the war-torn country and recovering the economy, one of the poorest in Europe. Though the country was once prosperous, the political unrest in the 1990s led to a dramatic change in the economy of Bosnia. The GDP of the country fell by 60% during this time, and the destruction of the country’s physical infrastructure devastated its economy. Though the economy of Bosnia and Herzegovina has gradually recovered, a large trade deficit and a high unemployment rate of 38.7% are causes of concern.
4. Albania - $5,289
Albania is a Southeast European nation bordered by Kosovo, North Macedonia, Greece, and Montenegro. It also has a coastline on the Ionian Sea and the Adriatic Sea. Though Albania is one of the poorest countries in Europe, the economy of the country is constantly improving. Since the early 1990s, the country’s economy has undergone a major shift from a Communist principle based one to an open-market economy. The country’s rich natural resources have promoted the rapid economic development.
3. Kosovo - $4,403
Kosovo ranks third among the poorest countries in Europe. The country is a landlocked region located in the central Balkan Peninsula. It is a disputed territory and a partially recognized state. Kosovo has a transition economy and was former Yugoslavia’s poorest province. During the 1990s, a number of poor economic reforms, the abolition of autonomous institutions, reduced access to external trade and finance severely damaged the already weak economy of Kosovo. After the 2008 declaration of independence, the economy of Kosovo exhibited a gradual improvement but still the disputed status of the region act as a barrier to quick economic growth. However, a strong banking system and low levels of economic debt and liabilities are the strengths of the economy of Kosovo.
2. Moldova - $3,218
Moldova is an Eastern European landlocked nation that is bordered by Ukraine and Romania. Chișinău is the capital city of the country. Moldova is the second poorest country in Europe. The country suffered a major economic setback after the breakup of the USSR. In a climate of political uncertainty and weak administrative capacity, the Moldovan economy faced energy shortages and trade obstacles. The major objective of the newly formed Moldovian government was thus to stabilize the economy and recover the financial status of the country. The government introduced convertible currency, liberalized interest rates and prices, backed steady land privatization, removed controls on exports, and backed the privatization of lands to achieve this aim. With new policies implemented, the economy of Moldova has exhibited a steady growth and recovery.
1. Ukraine - 2,963
Though the Ukrainian economy was the second largest in the Soviet Union, after the dissolution of the union, independent Ukraine made a major transition from a planned economy to a market economy which plunged a major section of the country into poverty. The economy of Ukraine contracted severely, and people in the country struggled to live. Ukrainians in rural areas grew their own food and worked more than one job to earn an income that would ensure survival. Inflation gripped the country and in 1993, Ukraine became the world record holder for inflation in 1 calendar year. By 1999, the GDP of Ukraine fell to less than 40% of what it was in 1991. The suffering economy once again was hit by the economic crisis of 2008. Since then, the economy has been improving but even in 2014, the GDP of Ukraine was yet to reach the historical maximum. Corruption, bureaucratic red-tape, underdeveloped infrastructure and transportation are some of the problems prevalent in the country. Despite these issues, Ukraine has managed to reduce absolute poverty and its poverty rate has decreased from 11.9% in 2000 to 2.3% in 2012. As of 2018, the per capita income in Ukraine is $2,963, making it the poorest country in Europe.