Monthly Report No. 7-8/2022


Vasily Astrov, Alexandra Bykova, Rumen Dobrinsky, Selena Duraković, Richard Grieveson, Doris Hanzl-Weiss, Gabor Hunya, Branimir Jovanović, Niko Korpar, Sebastian Leitner, Isilda Mara, Bernhard Moshammer, Olga Pindyuk, Sandor Richter, Bernd Christoph Ströhm, Maryna Tverdostup, Nina Vujanović, Zuzana Zavarská and Adam Żurawski

wiiw Monthly Report No. 7-8, July-August 2022
58 pages including 4 Tables and 21 Figures

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OVERVIEW 2020-2021 AND OUTLOOK 2022-2024
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Summary of key recent macroeconomic data for CESEE, and overview of new wiiw forecasts for 2022-2024 (Excel file)

Summer Forecast Update

Impressive Resilience is Unlikely to Last

Economic Forecasts for Eastern Europe for 2022-24

Despite impressive resilience among CESEE economies so far, intensifying supply-chain bottlenecks, soaring commodity prices and a decrease in external demand will weigh on growth during the second half of 2022. Consumer and business confidence is declining, and high inflation will increasingly eat into real household incomes. However, with the exception of the CIS and Ukraine, CESEE is expected to avoid a recession in 2022. Russia appears to be more resilient in 2022 than we had previously expected, but this is mainly because the full impact of the oil embargo will be felt in 2023. For Ukraine and Moldova, being granted EU candidate status represents a decisive step towards their EU integration; although the accession process may last a long time, the status will provide a stronger anchor for the reform process in the two countries than previous bilateral institutional arrangements. All forecasts in this environment are subject to a very high degree of uncertainty, reflecting the unpredictability of the future course of the war. Downside risks are high, owing in particular to the potential for a further reduction in Russian gas supplies during the winter, and the possibility that high inflation and tighter monetary policy will cause financial turbulence.

CESEE Overview by Olga Pindyuk
High inflation spurred by Russia’s war in Ukraine is causing slower growth in CESEE, but a recession should still be avoidable for most. 

Challenges for Austria in light of the war in Ukraine by Bernhard Moshammer
Due to its high reliance on Russian energy, Austria is vulnerable to a winter gas shut-off, but the prospects for labour market integration of Ukrainian refugees are fairly good.

Country updates:

  • Albania: Inflationary pressure is holding back consumption and growth by Isilda Mara
  • Belarus: Sliding into a deep recession by Rumen Dobrinsky
  • Bosnia and Herzegovina: Political turbulence and inflation take their toll on the economy by Selena Duraković
  • Bulgaria: A new political crisis raises economic uncertainty by Rumen Dobrinsky
  • Croatia: No respite in sight by Bernd Christoph Ströhm
  • Czechia: Headwinds proving strong and persistent by Zuzana Zavarská
  • Estonia: Clouds are gathering as autumn approaches by Maryna Tverdostup
  • Hungary: The emergency brake is being applied by Sándor Richter
  • Kazakhstan: High oil price is favourable for growth, but geopolitical risks remain by Alexandra Bykova
  • Kosovo: Remittances come to the rescue by Isilda Mara
  • Latvia: War-induced slump kept in check by Sebastian Leitner
  • Lithuania: Reduced purchasing power of households amid a tightening labour market by Sebastian Leitner
  • Moldova: Recession ahead by Gábor Hunya
  • Montenegro: Inflation will weigh on growth by Nina Vujanović
  • North Macedonia: When inflation runs out of control by Branimir Jovanović
  • Poland: So far so good by Adam Żurawski
  • Romania: Adverse impacts of inflation and war come with a delay by Gábor Hunya
  • Russia: Currency rebound delays the peak of the crisis by Vasily Astrov
  • Serbia: Still standing by Branimir Jovanović
  • Slovakia: Negative risks cloud the outlook by Doris Hanzl-Weiss
  • Slovenia: Regional outperformer by Niko Korpar
  • Turkey: Foot to the floor, hoping for the best by Richard Grieveson
  • Ukraine: Persevering in time of war by Olga Pindyuk


Reference to wiiw databases: wiiw Annual Database, wiiw Monthly Database, wiiw FDI Database

Keywords: Keywords: CESEE, economic forecast, Central and Eastern Europe, Western Balkans, EU, euro area, CIS, Austria, war in Ukraine, Ukrainian refugees, energy dependence, EU accession, COVID-19, EU Recovery and Resilience Facility, economic growth, labour markets, inflation, stagflation, monetary policy, fiscal policy

JEL classification: E20, E21, E22, E23, E24, E31, E32, E5, E62, F21, F31, H60, I18, J20, J30, O47, O52, O57, P24, P27, P33, P52

Countries covered: Albania, Belarus, Bosnia and Herzegovina, Bulgaria, CESEE, CIS, Croatia, Czechia, Estonia, EU-CEE, European Union, Hungary, Kazakhstan, Kosovo, Latvia, Lithuania, Moldova, Montenegro, New EU Member States, North Macedonia, Poland, Romania, Russia, SEE, Serbia, Slovakia, Slovenia, Turkey, Ukraine

Research Areas: Macroeconomic Analysis and Policy