In its forecast of November 2017, WIIW continues to predict positive economic development for 2018 and 2019. Economic growth is expected to be stronger in small countries compared to 2017, while slowdowns could occur in some large countries. Slowdowns of this kind will likely be small in 2018. A stabilisation or new increase could even occur in 2019. Real economic growth in the CEE region will be significantly higher than 3% in both years. Due to the economic catch-up process taking place in small countries, such as Macedonia and Serbia, the CEE region is not only converging to Western Europe, but also becoming a more economically uniform region. Although the lowest national GDP growth rate in the region was still around 2% in 2017 (Macedonia), this will increase to 2.3% in 2018 and 2.6% in 2019 (Belarus in both cases).
The growth rate for the Czech Republic is expected to decrease to 3.2% in 2018. Economic growth will also be slower in Poland (3.5%), Romania (4.5%) and Turkey (3.9%) than the calendar year just ended. However, the growth rates expected for the Czech Republic, Poland and Turkey are still higher than those recorded in 2016. These growth rates are also solid or even excellent, especially when compared to Western European economies, and will continue to stabilise in 2019.
The positive economic development in the CEE region is primarily due to a combination of decreasing unemployment and rising wages, leading to strong private consumption, and slow increases in investment and net exports. All these factors directly or indirectly depend on increasingly well-established value chains that often have strong Western European demand at their end. Based on this, the CEE region will also continue to benefit from the robust economic development that is forecast for the Eurozone.