Directional Economics: Why CEE is withstanding the European slowdown
2019 growth across a large part of the Central and Eastern European region is running above potential. This is in stark contrast to Western European countries, particularly Germany. The big question: Is a significant downturn just a matter of time, or are things fundamentally different now than they were just five or ten years ago?
Executive summary
2019 will be remembered as a year of declining trade volumes and an industrial sector under intense pressure.
With its international footprint and heavy reliance on manufacturing, Germany has been at the forefront of the slowdown story. The presumption here has been that the high-beta and integrated economies of Central and Eastern Europe (CEE) will soon be suffering as well.
In fact, the CE4 economies (Czech Republic, Hungary, Poland and Romania) have been growing above potential through the first half of 2019.
In this report, we look at the reasons for this ongoing resilience and examine whether it can continue in 2020, as Germany flirts with recession.
This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more