Central & Eastern Europe Economic Outlook
The CEE economy should strengthen considerably this year from last. Consumer spending should drive growth, bolstered by rising real wages, lower inflation and falling interest rates. The latter will also support investment activity, which will likewise be supported by the disbursement of EU funds. Commodity prices and geopolitics are factors to monitor.
Central & Eastern Europe Inflation
Regional inflation fell to 3.6% in February from 4.1% in January amid a broad-based moderation on a high base effect. Inflation will average lower this year than in 2023 due to the lagged impact of interest rate hikes. A wage-price spiral and higher-than-expected fiscal spending pose upside risks. The evolution of commodity prices and exchange rates will be key.
This chart displays Economic Growth (GDP, ann. var. %) for Central & Eastern Europe from 2010 to 2023.
| 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|
| Economic Growth (GDP, ann. var. %) | 3.9 | -3.4 | 6.4 | 4.1 | 0.5 |
| Private Consumption (ann. var. %) | 3.5 | -3.9 | 6.3 | 4.4 | -0.4 |
| Fixed Investment (ann. var. %) | 7.7 | -3.2 | 2.6 | 4.0 | 6.3 |
| Industrial Production (ann. var. %) | 1.6 | -4.6 | 11.0 | 5.6 | -2.7 |
| Unemployment (% of active population, aop) | 4.6 | 5.8 | 5.3 | 4.8 | 4.8 |
| Fiscal Balance (% of GDP) | -1.0 | -6.9 | -4.1 | -3.8 | - |
| Public Debt (% of GDP) | 43.1 | 53.9 | 52.8 | 49.9 | - |
| Inflation (CPI, ann. var. %, aop) | 2.7 | 2.6 | 4.4 | 14.3 | 11.2 |
| CBI Policy Rate (%, eop) | 1.35 | 0.37 | 1.75 | 6.48 | 6.34 |
| Exchange Rate (LBP per USD, eop) | 43.15 | 41.70 | 45.75 | 50.20 | 47.67 |