Ukraine War Slows Recovery of Central, Eastern and Southeastern Europe from the COVID-19 Crisis

Recent sharp increases in energy and food prices have resulted in a marked acceleration of inflation in the Central, Eastern and Southeastern European countries (CESEE), which is being combated with a mix of restrictive monetary and expansionary fiscal policies. Despite the overall low trade dependence of most CESEE countries on Russia and Ukraine, the losses in some sectors such as the automotive industry could be significant. The slowdown in growth expected in 2022 in most CESEE countries is likely to be temporary, it should pick up again in 2023. Several CIS countries and Ukraine will experience a recession in 2022, which in the case of Russia is likely to continue into next year.