East European growth in 2023 will be modest at best

Significance

Some countries are dipping into recession, while others are likely to manage modest growth. Their various policy and real-economy responses point to different strengths and weaknesses in their economies as well as different political priorities.

Impacts

• Interest rates are likely to remain high during 2023.
• Public investment backed by EU funding could be a significant driver of growth.
• Underlying assumptions of global disinflation and an opening up of trade will be tested.
• A stronger focus on energy transition could strengthen long-term economic prospects.