The economies of Central, Eastern and South-Eastern European countries are recovering much faster than expected; and the Western Balkans, primarily Serbia, are leading in the recovery, the Vienna Institute for International Economic Studies (WIIW) concluded in its summer forecast for 2021.
“The largest economic growth this year, at 5.1%, will be recorded in the Western Balkans, benefiting the Austrian economy, which is strongly represented in that part of Europe,” the report said.
“Serbia ranks highest with projected GDP growth of 6%. By mid-2021, the country will have reached the pre-crisis GDP level,” says the WIIW.
The countries of Central, Eastern and South-Eastern Europe are benefiting from strong economic growth in the United States and China, but also from better prospects in the eurozone. The WIIW has therefore significantly revised its forecasts for the region and is counting on total GDP growth of 4.2%.
“Despite the depressing health situation, this region did better than expected in the first quarter, which indicates that the economy has adapted to the pandemic,” says the study’s lead author, Branimir Jovanović.
The WIIW revised its growth forecasts for 20 of the 23 Eastern European countries by 0.4 per cent compared to its April forecast. “We expect that, above all, household consumption will be the main stimulus for economic growth,” said Mario Holtzner from the Institute.
The Institute expects inflation to be higher than expected due to higher energy and food prices. The average inflation rate in the 23 countries in May was 4.5 per cent and thus at pre-2015 levels.
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