Economic Forecast for Central and Eastern Europe and South-Eastern Europe
Central and Eastern Europe
Reduced Romania's projected GDP growth for 2025 to 0.7% as per Raiffeisen's latest assessment
The economic outlook for Central and Eastern Europe shows a positive growth trend, but with moderated expectations for the years 2025 and 2026. The European Commission forecasts a modest growth rate of 1.3% for the euro area in 2025, rising to 1.8% in 2026 [2][3]. Inflation remains a concern, driven by factors such as wage pressures [2].
Hungary, a member of Euroconstruct, is expected to have a GDP growth rate of 1.65% in 2025-2026, which falls between the regional average and the broader EU outlook [1]. Other Central and Eastern European countries, such as Poland and the Czech Republic, are not explicitly mentioned in the forecasts but generally follow similar trends with moderate growth expectations.
South-Eastern Europe
In South-Eastern Europe, countries like Romania exhibit varied growth. Romania is projected to grow between 1.8% and 2.2% in 2025-2026, similar to other regional countries like Bulgaria and Slovenia [1]. However, the economic outlook for Romania has seen significant downward revisions, reflecting broader regional trends [1].
Compared to Romania, other South-Eastern European countries like Serbia and Croatia are expected to have higher growth rates. Serbia is forecasted to have the highest growth at 3.5%, followed by Croatia at 3.05% [1]. These countries are expected to outperform the averages of the EU and the Euro Area, continuing the trend of stronger growth in Eastern and Southeast Europe [1].
Comparison
South-Eastern Europe, particularly countries like Serbia and Croatia, are expected to experience higher economic growth rates than many in Central and Eastern Europe. Romania's growth is more aligned with the lower end of the South-Eastern European range but still outperforms the EU average. Central and Eastern European countries like Hungary face more moderate growth, influenced by broader European economic trends.
| Region/Country | Forecasted Growth 2025-2026 | |----------------|---------------------------| | Romania | 1.8% - 2.2% | | Hungary | 1.65% | | Serbia | 3.5% | | Croatia | 3.05% | | EU Average | 1.3% (2025), 1.8% (2026) |
Additional Insights
Raiffeisen Bank has provided further insights into the economic forecasts for the region. According to their projections, inflation in the Czech Republic is expected to be 2.5% in 2025 and 2.3% in 2026 [4]. Raiffeisen anticipates a gradual easing of the National Bank of Romania's key interest rate to 5.25% in 2026 and 3.5% in 2027 [4]. Raiffeisen Bank analysts predict a negative impact on small and open economies in Central Europe due to the challenging global trading environment [4].
However, Poland is seen as a positive exception due to the anticipated release of European Union funds by 2025 [4]. Inflation in Hungary is expected to be 4.5% in 2025 and 3.8% in 2026 [4]. Average inflation in Romania is projected to reach 6.5% in 2025 and 5.9% in 2026 [4]. The National Bank of Romania is expected to maintain its key interest rate at 6.5% in 2025 [4].
Raiffeisen Bank projects GDP growth of 1.8% for South-Eastern Europe in 2025 and 2.2% in 2026 [4]. Raiffeisen Bank has reduced its projection for Romania's economic growth in 2025 to 0.7% [4]. Raiffeisen's forecast downgrades were recorded for South-Eastern Europe, with Romania's weaker performance expected to drag on the regional average [4]. The steepest forecast downgrades were recorded for South-Eastern Europe, where Romania's weaker performance is expected to be the most significant [4].
Sources:
[1] Euroconstruct (2023). Euroconstruct Spring Forecast 2023
[2] European Commission (2023). Economic Forecast - Spring 2023
[3] European Central Bank (2023). Macroeconomic Projections for the Euro Area
[4] Raiffeisen Bank International (2023). Central, Eastern and South-Eastern Europe: Economic Forecasts 2023/2024
In the specified economic forecast, the projected GDP growth rates of Hungary in 2025-2026, falling between the regional average and the broader EU outlook, indicate a moderate growth trend in its business sector [1]. On the other hand, South-Eastern European countries like Serbia and Croatia, with projected growth rates of 3.5% and 3.05% respectively, demonstrate a stronger growth trajectory in their business and finance sectors compared to many Central and Eastern European countries [1].
