March 20 (SeeNews) - The aggregate real economic growth of 22 countries in Central, East and Southeast Europe (CESEE) is expected to slow to 3.1% in 2018, from 3.7% in 2017 - the strongest level in the last six years, the Vienna Institute for International Economic Studies (WIIW) said .
The main risks to regional growth are trade wars, exit of major central banks from extraordinarily loose monetary policy, EU splits and geopolitical tensions, WIIW said in a press release last week.
In 2019 and 2020, the region's economic growth is seen decelerating to 2.9% and 2.8%, respectively.
"We do not think that any economy in the region is overheating, although there are growing risks in Romania and Turkey. We expect inflation to remain very subdued in most of CESEE during the forecast period," WIIW added.
Wage increases in most of CESEE have been strong but are concentrated largely in the manufacturing sector, and have been more than offset by rising labour productivity and non-price competitiveness.
The banking sectors in the countries of CESEE are generally on a much stronger footing than a few years ago, the WIIW said. However, the old pre-crisis, highly leveraged model reliant on foreign inflows is mostly a thing of the past, meaning that credit growth will be relatively low by historical standards in the coming years.
Across the region, investment will rise faster than headline real GDP growth in 2018-2020, driven by low interest rates, high capacity utilisation, stronger confidence, EU funds and still low base effects.
Details on the economic growth forecasts of WIIW for Southeast Europe (SEE) countries follow:
Country: |
2018 |
2019 |
2020 |
Bulgaria |
3.6% |
3.5% |
3.4% |
Croatia |
2.7% |
3.0% |
3.0% |
Romania |
4.7% |
3.8% |
4.2% |
Slovenia |
3.9% |
3.5% |
3.5% |
Albania |
4.1% |
4.0% |
3.9% |
Bosnia&Herzegovina |
3.4% |
3.3% |
3.3% |
Montenegro |
2.9% |
3.0% |
3.1% |
Macedonia |
3.4% |
3.4% |
3.2% |
Serbia |
2.8% |
2.8% |
2.8% |
Kosovo |
3.9% |
3.8% |
3.8% |
Source: WIIW
The CESEE region includes 11 EU-member states, six Western Balkan countries, three members of the Commonwealth of Independent States, as well as Turkey and Ukraine.