Central & Eastern Europe Economic Outlook
The regional economy will expand at a meager pace this year. Above-target inflation, falling savings and purchasing power, and tight financing conditions will weigh on domestic demand. Additionally, global economic headwinds will buffet the industrial and external sectors. Lower energy prices pose an upside risk, while the prolongation of the Ukraine war clouds the outlook.
Central & Eastern Europe Inflation
Regional inflation dropped to 16.4% in March from 18.9% in February. Price pressures softened throughout the region—barring Slovenia. Inflation should moderate further ahead, but it will remain high due to statistical carry-over, sustained nominal wage growth and protracted pass-through effects.
This chart displays Economic Growth (GDP, ann. var. %) for Central & Eastern Europe from 2010 to 2021.
| 2017 | 2018 | 2019 | 2020 | 2021 | |
|---|---|---|---|---|---|
| Industrial Production (ann. var. %) | 6.3 | 4.5 | 1.9 | -4.7 | 11.4 |
| Unemployment (% of active population, aop) | 5.9 | 5.0 | 4.5 | 5.8 | 5.2 |
| Fiscal Balance (% of GDP) | -0.9 | -0.5 | -1.0 | -6.9 | -4.1 |
| Public Debt (% of GDP) | 47.5 | 45.2 | 43.1 | 53.9 | 52.9 |
| Inflation (CPI, ann. var. %, aop) | 2.0 | 2.5 | 2.7 | 2.6 | 4.4 |
| Policy Rate (%, eop) | 1.21 | 1.58 | 1.63 | 0.45 | 2.10 |
| Economic Growth (GDP, ann. var. %) | 5.0 | 4.7 | 3.9 | -3.4 | 6.4 |
| Private Consumption (ann. var. %) | 5.3 | 4.8 | 3.5 | -3.8 | 6.4 |
| Fixed Investment (ann. var. %) | 5.5 | 9.3 | 7.6 | -2.9 | 2.2 |
| Exchange Rate (LCU per USD, eop) | 31.8 | 34.3 | 35.9 | 34.7 | 38.0 |