The economies of Southeastern Europe may be hurt by slowing global growth and financial turmoil, according to 10 central bank governors. There are «heightened uncertainties stemming from a possible further deceleration in the growth rates of world output and trade in the event that the turmoil persists,» central bank chiefs from countries including Romania, Greece and Bulgaria said in a joint statement after a meeting yesterday in Thessaloniki. Widening current account deficits and accelerating inflation added to concerns that a possible US recession and falling markets may stem growth in the Balkan region, which stretches from Greece to Croatia and includes the former communist states of Romania, Bulgaria, Serbia, Montenegro, Bosnia-Herzegovina, Albania and the Former Yugoslav Republic of Macedonia (FYROM). Fitch Ratings on January 31 lowered its credit rating outlooks for Bulgaria and Romania to negative from stable, citing deteriorating economic imbalances in the two nations that joined the European Union last year. «Large economic weaknesses combined with the uncertainties surrounding global markets and the growth outlook could lead to a hard-landing scenario,» Gaelle Cibelly, an analyst at Deutsche Bank AG, said in a January 10 report on Romania, Bulgaria and Serbia. Romania’s current account gap widened in the first 11 months of last year to a record 15.29 billion euros ($23 billion). Bulgaria’s 11-month current account gap was 18 percent of the nation’s GDP. Deficit failure Failure to narrow deficits «may undermine» the region’s growth prospects, Greek central bank Governor Nicholas Garganas, who convened the meeting, said in a news conference in Thessaloniki after the meeting. Central banks from eight Southeast European countries met in July to improve financial regulation and fight money laundering and terrorism in the region of 60 million people. That group widened as Bosnia and Montenegro joined Greece, Bulgaria, Romania, Serbia, Albania, FYROM and the Mediterranean island nation of Cyprus. A slowing economy would reduce the pace of lending growth and deteriorate loan quality. Many of the loans are in foreign currency, making banks’ profits sensitive to foreign exchange volatility. The central bankers today pledged to boost cooperation in financial regulation to avoid deterioration of lending standards and loan quality in the region. Finding areas in which supervisory practices should converge is the «absolute priority,» Garganas said. «The commonly accepted wisdom at the start of 2007 was that emerging Europe was a wonderful growth opportunity,» Citigroup said in a February report. «A year later, investors are not so sure.» Shares in Austria’s Erste Bank der Oesterreichischen Sparkassen and Greece’s EFG Eurobank, have respectively lost 28 percent and 20 percent since the beginning of the year, partly on concern that slower economic growth may hurt their earnings. That outpaces the 15 percent decline in a Bloomberg index of 60 European banks over the same period. European banks, mainly from Greece, Austria, Cyprus and Italy, have expanded into the former communist Balkan nations such as Bulgaria and Romania, where economic growth outpaces that in the euro area, boosting lending to households and companies.