Growth of 2.7 percent
Central Europe’s economy to grow slightly this year
In the countries of Central, Eastern and Southern Europe, economic growth is likely to be weaker this year than recently expected. The Vienna Institute for International Economic Studies expects an average increase of 2.7 percent.
An increase of 2.8 percent is expected for EU members in the region. The frontrunner in terms of growth among the eastern EU members is Poland, closely followed by Croatia. The six countries in the Western Balkans will expand comparatively strongly in 2025 and 2026, as will Turkey.
The Austrian economy is likely to receive a tailwind from growth in Poland, the Czech Republic, Hungary and Slovenia. Austria's economy is "likely to stagnate this year", it says.
This is the economic forecast for Eastern Europe.
Bleak prospects for Ukraine and Russia
In Russia, last year's strong growth is likely to slow to 1.8 percent this year. In Belarus, which is closely intertwined with the Kremlin, an increase of two percent is expected. Inflation has risen sharply in Russia, with high interest rates making loans unaffordable for most companies and consumers. "In addition, the Russian economy is threatened by a wave of bankruptcies among companies that can no longer service their loans," said Vasily Astrov from the Vienna Institute for International Economic Studies.
The outlook for Ukraine, a country at war, has also clouded over. Economic growth of three percent is expected for 2025. The labor shortage is worsening and the drought has caused food prices to rise.
Uncertainties currently exist due to US President Donald Trump's economic policy, as he could impose tariffs against the EU and "not give Putin an easy victory by letting the country fall".
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