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CESEE in 2027: Resilient growth in a more dangerous world

Author

Listed:
  • Vasily Astrov

    (The Vienna Institute for International Economic Studies, wiiw)

  • Alexandra Bykova

    (The Vienna Institute for International Economic Studies, wiiw)

  • Selena Duraković

    (The Vienna Institute for International Economic Studies, wiiw)

  • Meryem Gökten

    (The Vienna Institute for International Economic Studies, wiiw)

  • Richard Grieveson

    (The Vienna Institute for International Economic Studies, wiiw)

  • Gabor Hunya

    (The Vienna Institute for International Economic Studies, wiiw)

  • Branimir Jovanović

    (The Vienna Institute for International Economic Studies, wiiw)

  • Biljana Jovanovikj

    (The Vienna Institute for International Economic Studies, wiiw)

  • Jakub Komárek

    (The Vienna Institute for International Economic Studies, wiiw)

  • Niko Korpar

    (The Vienna Institute for International Economic Studies, wiiw)

  • Dzmitry Kruk
  • Isilda Mara

    (The Vienna Institute for International Economic Studies, wiiw)

  • Michał Możdżeń
  • Emilia Penkova-Pearson
  • Emilė Petravičiūtė
  • Olga Pindyuk

    (The Vienna Institute for International Economic Studies, wiiw)

  • Sandor Richter

    (The Vienna Institute for International Economic Studies, wiiw)

  • Bernd Christoph Ströhm

    (The Vienna Institute for International Economic Studies, wiiw)

  • Marina Tverdostup

    (The Vienna Institute for International Economic Studies, wiiw)

Abstract

Despite a stronger-than-expected recovery in European industry, the euro area faces a difficult outlook, with renewed inflationary pressures, high interest rates and mounting fiscal challenges expected to constrain growth in 2027. Against this backdrop, most economies in Central, East and Southeast Europe (CESEE) remain resilient and continue to outperform Western Europe, although differences between countries are widening. The region's traditional growth model, based on cheap labour, foreign investment and German industrial demand, is giving way to one increasingly driven by domestic demand, automation and investment in defence, energy and higher-value industries, creating new opportunities alongside significant geopolitical and economic risks.

Suggested Citation

  • Vasily Astrov & Alexandra Bykova & Selena Duraković & Meryem Gökten & Richard Grieveson & Gabor Hunya & Branimir Jovanović & Biljana Jovanovikj & Jakub Komárek & Niko Korpar & Dzmitry Kruk & Isilda Ma, 2026. "CESEE in 2027: Resilient growth in a more dangerous world," wiiw Forecast Reports Autumn2026, The Vienna Institute for International Economic Studies, wiiw.
    • Handle: RePEc:wii:fpaper:fc:autumn2026
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    JEL classification:

    • E20 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - General (includes Measurement and Data)
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • H60 - Public Economics - - National Budget, Deficit, and Debt - - - General
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries
    • P24 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - National Income, Product, and Expenditure; Money; Inflation
    • P27 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Performance and Prospects
    • P33 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - International Trade, Finance, Investment, Relations, and Aid
    • P52 - Political Economy and Comparative Economic Systems - - Comparative Economic Systems - - - Comparative Studies of Particular Economies

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