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10 megatrends shaping emerging Europe in the post-pandemic 2020s
Clare Nuttall in Glasgow
Once the pandemic is over, Emerging Europe can expect a rebound in economic activity, but accompanied by mounting risks from climate change and geopolitical standoffs.
An online conference organised by
the Vienna Institute for International Economic Studies (wiiw) on May 5 tackled the tricky subject of forecasting the future of the region for the rest of this decade. The following list of megatrends is based on projections by wiiw panellists and bne IntelliNews’ own reporting.
1. Roaring twenties redux with
a risk of bubbles
The recovery of the Central and Eastern Europe (CEE) region was put on hold
by the new wave of the pandemic at
the beginning of 2021, but as the wave subsides and vaccination gets underway,
better times are already in sight. wiiw expects most of the region to return to pre-pandemic GDP levels by the end
of the year, and for robust consumption- fuelled growth to continue in the coming years.
Indeed, representatives of some inter- national retail and consumer products giants are already projecting a repeat of the roaring twenties a century ago. But that didn’t end well, and this time around wiiw economist Olga Pindyuk warned there are already signs of bubbles forming in housing markets in the region, especially those countries like Russia and Romania that received a further boost from government pro- grammes to support mortgage lending.
Growth won’t be evenly spread in the 2020s. The EU members that are already
the richest and most developed in the region will receive extra stimulus from the bloc’s €1.8 trillion recovery and resilience package.
The Western Balkan countries that aim to join the EU are still a long way behind eco- nomically, and convergence will be slow. The World Bank anticipates only a subdued recovery in the region. Some – Montenegro and Serbia are the most advanced – may make it into the EU by 2029 but political issues on both sides are holding up enlarge- ment and keeping candidate countries stuck in the EU’s waiting room.
Meanwhile, poorer countries, among them Europe’s two poorest nations Moldova and Ukraine, will take many years to vaccinate their populations at current rates, further delaying their recoveries.