For the second consecutive year, all countries from Central and Southeastern Europe posted positive real GDP growth rates in 2018, says the Handbook of Statistics 2019 published by the Vienna Institute for International Economic Studies (wiiw).
Notably, Hungary, Poland and Montenegro, grew by more than 5 per cent. Overall, slightly more than half of CESEE countries posted stronger growth in 2018 relative to 2017. Of the remaining countries, the most significant slowdowns relative to the previous year were recorded in Romania.
CESEE economies have generally been resilient to external headwinds and maintained a significant positive growth differential from Western Europe in 2018. Most of the economies moved closer to the average EU28 per capita income level with the Czech Republic topping the list.
In 2018 real wages grew faster in the majority of the CESEE countries than in the euro area on average. Economic convergence is hence reflected in the catching-up of living standards. On a sub-regional level, Ukraine and the CIS countries experienced stronger annual real wage increase in 2018 compared with the previous year, and well above their five-year averages.
However, regional income disparities between CESEE countries remain large, and the catching-up process for most non-EU economies in the region remains at a relatively early stage. Along with Ukraine, Moldova is the poorest country in the region in terms of GDP per capita at PPP. Moldova’s real GDP growth of 4 per cent or higher over the last three years is encouraging, but positive economic prospects are at risk due to domestic political uncertainty and unaccomplished reforms.
Most CESEE economies have not lost their attractiveness for foreign investors, despite a global trend of declining FDI. FDI inward stock growth in euro terms was particularly strong in Moldova, Albania, Serbia and North Macedonia in 2018 compared to the previous year.