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South-Eastern Europe Economic Forecast

South-Eastern Europe Economic Outlook

Regional economic growth is projected to soften this year, mainly due to a weaker expansion in heavyweight Turkey. That said, most other economies in the region are seen growing at a faster clip this year on lower inflation and interest rates. Ethno-nationalistic tensions and additional spillovers from the wars in Ukraine and Gaza are downside risks.

South-Eastern Europe Inflation

Regional inflation fell to 36.9% in January from December’s 37.0% due to softer price pressures in Croatia, Greece and Serbia. Inflation is forecast to decline from current levels by end-2024 thanks to a high base effect and the lagged effects of prior monetary tightening. Commodity price spikes and supply shocks stemming from conflict in the Red Sea pose upside risks.

This chart displays Economic Growth (GDP, ann. var. %) for South-Eastern Europe from 2010 to 2022.

2019 2020 2021 2022 2023
Inflation (CPI, ann. var. %, aop) 8.8 6.7 11.4 43.4 32.8
CBI Policy Rate (%, eop) 7.16 9.59 7.95 7.04 -
Exchange Rate (LBP per USD, eop) 11.45 12.05 16.46 20.01 -
Economic Growth (GDP, ann. var. %) 2.0 -1.7 9.6 5.1 -
Private Consumption (ann. var. %) 2.3 -0.6 11.5 13.1 -
Fixed Investment (ann. var. %) -3.3 3.9 7.4 3.8 -
Industrial Production (ann. var. %) -1.1 -1.6 13.2 3.9 -
Unemployment (% of active population, aop) 12.3 12.1 11.0 9.7 -
Fiscal Balance (% of GDP) -2.0 -5.8 -4.2 -2.2 -
Public Debt (% of GDP) 56.6 66.6 65.0 54.7 -

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