The EU countries in Central and Eastern Europe (CEE) should show economic growth of 2.6 percent this year and grow by around 3 percent next year, predict the economists at UniCredit Bank Austria in their “CEE Quarterly”. The Western Balkan countries should therefore develop somewhat better, according to the bank’s report.
“Private consumption is expected to lead the growth recovery, supported by faster real wage growth, rising borrowing and government transfers,” said Dan Bucsa, chief CEE economist at UniCredit. “Public investment represents the second largest growth engine, while net exports will slow GDP dynamics this year,” Bucsa said.
Economists expect budget deficits of less than 3 percent of gross domestic product (GDP) for Bosnia-Herzegovina, Bulgaria, Croatia, the Czech Republic and Serbia by 2025. In Hungary, Slovakia, Poland and Romania as well as Turkey, however, a budget deficit of more than 5 percent is to be expected.
The forecast assumes that pro-EU parties will win more than two thirds of the EU-CEE countries’ seats in the European Parliament. Therefore, the CEE-EU region will also claim more positions in the European institutions. But the chances of EU expansion are also increasing, according to the “CEE Quarterly”. If upcoming reforms are implemented, Western Balkan countries in particular could be among the beneficiaries of this expansion. According to the bank’s economists, joining the EU could also result in ratings being upgraded.
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