Monthly Report No. 1/2025

wiiw winter forecast update Growth mostly firming, despite major external headwinds and uncertainty Economic forecasts for Eastern Europe for 2025-27 The economic outlook for Central, Eastern, and Southeastern Europe (CESEE) in 2025 is mixed, with overall growth projected to slow to 2.7%. However, this slowdown is primarily due to weaker growth in Russia, with most other countries either maintaining 2024’s growth rate or expanding at a faster pace than last year. Consumption, investment, and EU funds are expected to drive growth, but weak external demand and inflation concerns are significant headwinds that will prevent a faster rate of expansion. The likelihood of new US tariffs, and continued geopolitical tensions, represent downside risks to growth. Executive summary by Richard Grieveson Winter 2024/2025 interim forecast update by Statistics Department 1. Global assumptions Bracing for impact by Richard Grieveson 2. CESEE outlook Growth mostly firming, despite major external headwinds and uncertainty by Richard Grieveson, Vasily Astrov, Meryem Gökten, Maciej J. Grodzicki, Branimir Jovanović and Olga Pindyuk 3. Country updates Albania Tourism momentum and economic growth continue by Isilda Mara Belarus Growth slowdown ahead by Dzmitry Kruk Bosnia and Herzegovina Historic increase in the minimum wage to boost the economy by Selena Duraković Bulgaria Schengen Area membership expected to boost the economy by Emilia Penkova-Pearson Croatia Among the euro area’s top performers by Bernd Christoph Ströhm Czechia Domestic strength offsetting external weakness by Richard Grieveson Estonia Economic recovery firming by Maryna Tverdostup Hungary Budget consolidation or a new attempt to accelerate growth? by Sándor Richter Kazakhstan Growth acceleration amid anticipated oil sector recovery by Alexandra Bykova Kosovo Resilient and steady growth by Isilda Mara Latvia Slower-than-expected recovery ahead by Sebastian Leitner Lithuania Domestic and foreign demand driving economic recovery by Sebastian Leitner Moldova Upswing held back by energy crisis by Gábor Hunya Montenegro Hints of growth amidst EU accession hopes by Marko Sošić North Macedonia Still searching for direction by Branimir Jovanović Poland Strong growth driven by domestic demand by Maciej J. Grodzicki Romania Modest recovery from near-stagnation by Gábor Hunya Russia Stubborn inflationary pressures pose a policy dilemma by Vasily Astrov Serbia Moment of truth by Branimir Jovanović Slovakia Start of fiscal consolidation by Doris Hanzl-Weiss Slovenia Despite industry worries, a year of solid growth ahead by Niko Korpar Turkey Navigating a soft landing amid global uncertainty by Meryem Gökten Ukraine Weak growth amid huge uncertainty by Richard Grieveson