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Monthly Report No. 1/2026

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)

  • Maciej Grodzicki
  • Ioannis Gutzianas

    (The Vienna Institute for International Economic Studies, wiiw)

  • Doris Hanzl-Weiss

    (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)

  • Niko Korpar

    (The Vienna Institute for International Economic Studies, wiiw)

  • Dzmitry Kruk
  • Sebastian Leitner

    (The Vienna Institute for International Economic Studies, wiiw)

  • Isilda Mara

    (The Vienna Institute for International Economic Studies, wiiw)

  • Emilia Penkova-Pearson
  • Olga Pindyuk

    (The Vienna Institute for International Economic Studies, wiiw)

  • Sandor Richter

    (The Vienna Institute for International Economic Studies, wiiw)

  • Marko Sošić
  • Bernd Christoph Ströhm

    (The Vienna Institute for International Economic Studies, wiiw)

  • Marina Tverdostup

    (The Vienna Institute for International Economic Studies, wiiw)

Abstract

Winter Forecast Update All eyes on investment as geopolitical pressures mount Economic Forecasts for Eastern Europe for 2026-28 The Winter 2026 economic outlook for Central, Eastern and South-Eastern Europe (CESEE) remains relatively resilient despite an increasingly turbulent global and geopolitical environment. Growth in the region continues to outperform Western Europe, but the underlying growth model is changing as the boost from rapid real wage gains fades and private consumption slows. Looking ahead, investment will play a more decisive role in sustaining growth, supported by EU-funded public investment, defence-related spending and, where conditions allow, easing monetary policy. At the same time, fiscal consolidation is set to intensify in several countries, constraining public demand. Heightened geopolitical risks, weak external demand and trade fragmentation remain key challenges, while the medium-term outlook will hinge on the region’s ability to attract productivity-enhancing investment and to navigate the economic implications of the war in Ukraine and shifting EU policy priorities.

Suggested Citation

  • Vasily Astrov & Alexandra Bykova & Selena Duraković & Meryem Gökten & Richard Grieveson & Maciej Grodzicki & Ioannis Gutzianas & Doris Hanzl-Weiss & Gabor Hunya & Branimir Jovanović & Biljana Jovanovi, 2026. "Monthly Report No. 1/2026," wiiw Monthly Reports 2026-01, The Vienna Institute for International Economic Studies, wiiw.
    • Handle: RePEc:wii:mpaper:mr:2026-01
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    File URL: https://wiiw.ac.at/monthly-report-no-1-2026-dlp-7492.pdf
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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
    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • 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
    • H60 - Public Economics - - National Budget, Deficit, and Debt - - - General
    • 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
    • P52 - Political Economy and Comparative Economic Systems - - Comparative Economic Systems - - - Comparative Studies of Particular Economies

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