WIIW The Vienna Institute for International Economic Studies - Wiener Institut für Internationale Wirtschaftsvergleiche

The years since 2019 have been tumultuous ones for CESEE, with the outbreak of the Covid-19 pandemic in 2020, followed by Russia’s full-scale invasion of Ukraine in 2022. In this context, over this period the continued per capita GDP convergence of almost all the CESEE countries with Germany has been remarkable. 21 of the 23 CESEE countries posted per capita GDP convergence with Germany in purchasing power standard (PPS) terms. The top performers were Turkey, Romania, Poland and Croatia, all of which increased their wealth levels versus Germany by 7 percentage points or more. However, while the positive per capita convergence performance is a welcome sign, it may have been helped by the region’s loss of population. Our new forecasts suggest that most countries of the region will continue to catch up with Germany, but there are major challenges to future convergence performance.