The latest forecast from the Vienna Institute for International Economic Studies (wiiw) indicates that growth across Central, East, and Southeast Europe is holding up, although inflationary pressures persist. While the region’s economy remains largely intact, the impact of geopolitical instability—including the Middle East energy shock and the ongoing conflicts—means the international outlook remains complex. Despite these risks, the core economies of Eastern Europe show resilience.
Growth in Central Eastern Europe is supported primarily by positive private consumption and EU funding, though the industrial sector faces structural challenges related to German manufacturing slowdowns. For 2026, eastern EU member states are projected to grow at 2.2%, rising to 2.4% in 2027. Conversely, the economic situations in conflict zones are significantly strained.
Ukraine’s trajectory is precarious following Russian air strikes, with growth forecasts remaining modest and contingent on de-escalation. Russia’s economy is projected to stagnate, hampered by restrictive monetary policies. The stability of the region, however, is dependent on external factors, such as the Strait of Hormuz remaining open.
While the overall performance of Central Eastern Europe is showing signs of remaining unscathed compared to neighboring areas, inflation is expected to remain elevated for the near term. The forecasts suggest that while the broader European context presents difficulties, specific nations like Poland and Türkiye are expected to lead growth, underpinning the region’s overall stability through 2
Topics: #largely #europe #unscathed
