Eastern Europe overview

Countries in Central and Eastern Europe (CEE) remain on course for a generally-positive performance in 2016, as recently-released GDP outturns for Q1 were in line with expectations. Most panellists, though, worry about the effect of political risks, which could have policy implications and undermine foreign investment. A lack of economic vitality has fuelled disillusionment with EU membership and the erosion and effectiveness of key institutions. Autocratic and less predictable styles of leadership in Hungary, Poland and Turkey raise questions about debt and fiscal and monetary credibility, which could dampen momentum. Growth in Romania continues to be driven by domestic demand and public expenditure. However, the government’s budget deficit could climb in 2016, from 0.7% in 2015, while the current account deficit could double.

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