CESEE outlook


The OeNB and the Bank of Finland Institute for Economies in Transition (BOFIT) compile semiannual forecasts of economic developments in selected CESEE countries. They are based on a broad range of available information, including country-specific time series models for Bulgaria, Croatia, the Czech Republic, Hungary, Poland and Romania. The projections for Russia were prepared by the BOFIT and are based on an SVAR model.

OeNB-BOFIT outlook for selected CESEE countries

CESEE-6 economic growth robust but moving sideways

We project that CESEE-6 GDP growth will reach 4.0% per annum in 2018 and then soften slightly to 3.6% and 3.4% in 2019 and 2020, respectively. Overall, consumer sentiment continues to be bright, supported primarily by favorable labor market and lending conditions. Hence private consumption growth will remain fairly strong. Investment growth will peak in 2018. Overall, investment activity is benefiting from a high absorption of EU funds, brisk construction activity as well as the need to increase production capacities. In line with our assumption on euro area import growth, export activity in the CESEE-6 will weaken in 2018 and revive in 2019 and 2020. In parallel with softening export growth, import growth will also ease marginally in 2018 and edge up in 2019. Income convergence with the euro area is assumed to slow down from 2.0 to 1.7 percentage points over the projection horizon (2017: 2.3 percentage points). Risks are tilted to the downside and have increased since our previous forecast.

Outlook for selected CESEE countries (PDF, 0.2 MB)
Cut-off date for data: September 20, 2018