Central & Eastern Europe Economic Outlook
The CEE economy should strengthen considerably this year from last. Household spending should spearhead growth, buoyed by rising real wages, lower inflation and declining interest rates. The latter will also fuel investment activity, which will likewise be supported by the disbursement of EU funds—especially in H2. Commodity prices and geopolitics are factors to monitor.
Central & Eastern Europe Inflation
Regional inflation fell to 4.3% in January from 5.9% in December due to a strong base effect. Inflation will average lower this year than last on a high base of comparison and the lagged impact of interest rate hikes. A wage-price spiral poses an upside risk. The evolution of commodity prices and regional currencies will be key.
2019 | 2020 | 2021 | 2022 | 2023 | |
---|---|---|---|---|---|
Economic Growth (GDP, ann. var. %) | 3.9 | -3.4 | 6.4 | 4.1 | - |
Private Consumption (ann. var. %) | 3.5 | -3.9 | 6.3 | 4.6 | - |
Fixed Investment (ann. var. %) | 7.7 | -3.2 | 2.6 | 3.8 | - |
Industrial Production (ann. var. %) | 1.9 | -4.6 | 11.2 | 5.1 | -3.1 |
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 | 6.35 |
Exchange Rate (LBP per USD, eop) | 43.15 | 41.69 | 45.75 | 50.22 | 47.88 |