South Eastern Europe Economic Forecast

Economic Snapshot for South-Eastern Europe

July 6, 2021

Economic growth in South-Eastern Europe seen picking up this year

Regional economic activity is set to pick up this year as progress on the vaccination front facilitates the easing of restrictive measures. While growth expectations have been revised upwards in recent months, the outlook is still clouded by sluggish labor markets and pandemic-related uncertainty amid the emergence of new variants of Covid-19.

Inflationary pressures continue to build in South-Eastern Europe

Inflationary pressures continued to build in most of the region in May on the back of higher commodity prices, particularly for oil. However, regional inflation was stable at April’s 9.2% in May as price pressures softened in Turkey. This year, regional inflation should rise, but large output gaps and a stable euro will limit upward pressures.

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