Eastern Europe: Significant Changes in Long-Term Growth Expectations

Consensus Forecasts

Consensus Economics conducts regular surveys of long-term forecasts, when our country panellists are asked to provide forecasts for the next six years individually, followed by average projections for the next five year period beginning six years from the current year. For example, in our latest survey we asked for forecasts for the ‘2019-2023’ period, as well as for individual years through 2018. These rolling 5 year expectations are subject to high levels of uncertainty, given the risk attached to even the short-term outlook, but in general reflect changes in estimated long-term trends.

The 6-10 year indicator has deteriorated for most countries since the start of the global financial crisis, as outlook for debt and credit was tightened. In addition, sentiment has been pared back on demographic issues and persistent uncertainty about the future shape of the European Union. For the Czech Republic, the retreat in confidence encompasses its dependence on exports to the euro zone, which faces significant structural challenges. Similarly, Hungary has seen more than 1 percentage point shaved off its long-term 6-10 year estimate, due to a lack of reforms, a fragile banking system and unpredictable government policies, which have throttled private investment. In contrast, the Baltic nations have performed well, buoyed in part by a swift recovery from depression and wage and price flexibility/devaluations between 2008 and 2010, which reestablished competitiveness.

You can download a sample of Eastern Europe Consensus Forecasts at www.consensuseconomics.com.

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