The Wiener Institut für Internationale Wirtschaftsvergleiche (wiiw) has said that it expects accelerated growth for most economies in Central, Eastern, and Southeastern Europe (CESEE) in 2025, despite global uncertainties.
In its Winter Report, wiiw said that this positive outlook is likely to be particularly evident in CESEE countries that are part of the European Union.
According to the forecast, EU countries in the CESEE region are set to achieve an average growth rate of 2.8% in 2025, with a slight decrease to 2.7% the following year. These countries are also anticipated to outpace the rest of the eurozone, which is expected to grow by 1.2% in 2025 and 1.4% in 2026.
Poland the top performer
Poland is expected to lead the charge in this respect, with projected growth rates of 3.5% in 2025 and 3.0% in 2026.
Croatia is expected to see anticipated growth of 3.1% in 2025 and 3.0% in 2026, while the Western Balkans are also set to expand, averaging a 3.5% growth rate over the same period. Elsewhere, Turkey’s economy is forecast to grow by 3.5% in 2025 and 4.5% in 2026.
According to wiiw, a significant driver of this growth will be robust private consumption, fuelled by significant real wage increases. Consumer spending remains strong in the industrial sectors of countries like Poland, the Czech Republic, Slovakia, Hungary, and Romania, it noted.
The Trump effect
At the same time, wiiw’s prognosis also highlights a myriad of risks, most notably the policies of U.S. President Donald Trump, and the likelihood of tariffs being imposed on the European Union. In addition, uncertainties surrounding U.S. policy toward Ukraine could have economic repercussions.
wiiw has revised Ukraine‘s economic outlook downward, with 2025 growth now projected at 3%, a 0.3 percentage point decrease from previous estimates – infrastructure damage from the ongoing conflict, labour shortages, and reduced agricultural exports due to adverse weather conditions are among the reasons cited.
Russia, meanwhile, which saw growth rates of 3.8% in 2024, is likely to see its economy slow to 1.8% in 2025 and 1.6% in 2026. This deceleration is attributed to stringent monetary policies, including high interest rates, aimed at curbing rising inflation, which reached 9.5% at the end of 2024. Read more here.
