Persistent economic weakness in the euro zone has kept growth forecasts for Central and Eastern Europe under downward pressure. Most countries in the region will struggle to avoid a prolonged period of stagnation, which could be described as GDP growth below 1.5%. In addition, Croatia and Slovenia are set to remain in recession in 2013, due to a lack of domestic demand. In particular, further sharp declines in gross fixed investment are likely in the latter, despite a significant correction having already occurred in the private sector.
Turkey represents one of the few bright spots in the region and will see an improvement in the pace of its growth in 2013 over 2012 (+2.2%). However, confidence in the recovery momentum has eased, hampered by concerns about the uncertain outlook for exports, high inflation and a large current account deficit.
Countries that are forecast to see an expansion of more than 3.0% in the current year include Russia and the Baltic nations of Estonia, Latvia and Lithuania. In each case, growth in 2013 is expected to be exceeded by that of 2014, partly reflecting resilience in the domestic economy.
You can download a sample of Eastern Europe Consensus Forecasts at www.consensuseconomics.com.