Central, Eastern and South Eastern Europe Defies the Economic Slump in the Euro Area

The economic recovery in most countries in Central, Eastern and South Eastern Europe (CESEE) has recently gained momentum, primarily thanks to the fall in inflation, the rise in real wages and increased private consumption. At the same time, industry and exports in many countries, particularly in Central Europe and the Western Balkans, continue to suffer from the economic downturn in Germany. While financing costs generally remain high, the recovery is being supported by an expansive fiscal policy, which will further increase budget deficits in many countries in the region. Economic growth of 3.1 percent is forecast for the CESEE region as a whole in 2024. The expected acceleration in growth in the Central and Eastern European EU member countries (EU-CEE) and the Western Balkans is likely to be largely offset by the slowdown in other CESEE countries.