Page 46 - BNE_magazine_12_2019 dec19

46 I Central Europe bne December 2019
Western Europe is rapidly sliding into recession, but after a five-year-long boom, Central Europe is shrugging off the slowdown.
Central Europe shrugs off Western
Europe’s slowdown
Ben Aris in Berlin
Central Europe is coming out of
a five-year-long boom, but the economies of the region are
still healthy and what has surprised economists is that the region has managed to shrug off the dramatic slowdown that has gripped Western Europe.
For most of the last three decades, the economies of Central Europe have been closely tied to those of Western Europe, and that of Germany in particular. However, after half a decade of growth and investment the same economies have become increasingly robust because they are more and more able to support themselves from domestic consumption on their home markets. Germany’s economy in particular
is rapidly heading into recession, say experts, but so far that has only
www.bne.eu
had a mild effect on the Central European countries.
“Growth in Central and Eastern Europe (CEE) has held up well in the first half
of 2019. This is somewhat surprising given the significant slowdown of activity in the Euro area, as most of CEE is highly integrated into the European economy through trade and financial channels,” the Institute of International Finance (IIF) said in a note. “Euro area growth
decelerated due to trade tensions, Brexit, and geopolitical uncertainties, while Germany’s pronounced manufacturing recession stems from country-specific factors as well.”
The CEE5 (Czech Republic, Hungary, Poland, Romania, and the Slovakia) have been lifted by robust domestic demand that has so far kept growth going, the IIF said.
“Growth in Central and Eastern Europe (CEE) has held up well in the first half of 2019. This is somewhat surprising given the significant slowdown of activity in the Euro area”