Central & Eastern Europe: Growth is slowing but remains robust

3 min
Manfred Stamer
Manfred Stamer Senior Economist for Emerging Europe and the Middle East

First estimates indicate that real GDP growth in the group of 11 EU members in the CEE region came in at +4.2% y/y in Q4 (unchanged from Q3), taking full-year 2018 growth to an estimated +4.3%. The latter is slightly down from +4.7% in 2017 but well above the 10-year average of +2.3%. Poland outperformed the region last year with growth of +5.1% (for details see WERO 6 February 2019). In Hungary, annual GDP growth rose markedly to +4.8% (from +4.1%) amid ongoing overheating concerns stemming from rapid wage growth while monetary policy remains very loose. Growth accelerated also in Slovakia (to +4.1% from +3.4%) and Latvia (to +4.8% from +4.5%) while it moderated in Czechia (to +3% from +4.3%), Bulgaria (to +3.1% from +3.6%) and Lithuania (to +3.5% from +4.1%). Romania saw the steepest slowdown (to +4.1% from +7%) as the economy is rebalancing from overheating in 2017. Against the backdrop of an easing investment boom at home and a growth slowdown in Western Europe, we expect regional growth of the 11 EU members in CEE to moderate to around +3.3% in 2019.