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Winter Forecast Update

All eyes on investment as geopolitical pressures mount

Economic Forecasts for Eastern Europe for 2026-28

The Winter 2026 economic outlook for Central, Eastern and South-Eastern Europe (CESEE) remains relatively resilient despite an increasingly turbulent global and geopolitical environment. Growth in the region continues to outperform Western Europe, but the underlying growth model is changing as the boost from rapid real wage gains fades and private consumption slows. Looking ahead, investment will play a more decisive role in sustaining growth, supported by EU-funded public investment, defence-related spending and, where conditions allow, easing monetary policy. At the same time, fiscal consolidation is set to intensify in several countries, constraining public demand. Heightened geopolitical risks, weak external demand and trade fragmentation remain key challenges, while the medium-term outlook will hinge on the region’s ability to attract productivity-enhancing investment and to navigate the economic implications of the war in Ukraine and shifting EU policy priorities.

Global assumptions by Biljana Jovanovikj and Olga Pindyuk

CESEE Overview: All eyes on investment as geopolitical pressures mount by Richard Grieveson

CESEE risk and opportunities matrices

Country updates:

• Albania: Continuity of reform and robust growth by Isilda Mara
• Belarus: Ongoing slowdown in growth amid policy risks by Dzmitry Kruk
• Bosnia and Herzegovina: Growth momentum builds, though risks remain by Selena Duraković
• Bulgaria: Euro adopted, amid political turmoil by Emilia Penkova-Pearson
• Croatia: Slight growth slowdown ahead by Bernd Christoph Ströhm
• Czechia: Strong performance, lingering uncertainty by Ioannis Gutzianas
• Estonia: Patchy recovery in prospect by Maryna Tverdostup
• Hungary: Pre-election hand-outs ruining the budget by Sándor Richter
• Kazakhstan: From oil-fuelled boom to softer growth by Alexandra Bykova
• Kosovo: Strong growth momentum and renewed stability by Isilda Mara
• Latvia: Solid upswing lies ahead by Sebastian Leitner
• Lithuania: Economic recovery continuing at a decent pace by Sebastian Leitner
• Moldova: A return to growth by Gábor Hunya
• Montenegro: Fiscal risks ahead as EU negotiations near completion by Marko Sošić
• North Macedonia: Headline growth improves, but quality does not by Branimir Jovanović
• Poland: Domestic demand supporting solid growth by Maciej Grodzicki
• Romania: Outlook depressed by fiscal austerity by Gábor Hunya
• Russia: Another year of near-stagnation in prospect by Vasily Astrov
• Serbia: Still waiting for the reset by Branimir Jovanović
• Slovakia: Fiscal consolidation continuing to dampen growth prospects by Doris Hanzl-Weiss
• Slovenia: Economic recovery but mounting pre-election spending risks by Niko Korpar
• Turkey: Growth resilient despite high inflation by Meryem Gökten
• Ukraine: Worsening outlook amid massive missile attacks by Russia by Olga Pindyuk