Megatrends
The most influential Megatrends set to shape the world through 2030, identified by Euromonitor International, help businesses better anticipate market developments and lead change for their industries.
Learn MoreIn 2013, eight of the ten fastest growing economies in Europe are forecast to be Eastern European, transition economies. Click to Tweet! Given the high level of European integration that Eastern European states had been pursuing prior to the eurozone sovereign debt crisis, many expected these developing states to be disproportionately affected by the crisis. However, despite relying on the eurozone as a main source of capital and as their biggest export markets, these Eastern European economies have seen an upturn in growth levels. Growth rates aren’t quite back at pre-crisis levels, however, and these economies are looking beyond their immediate neighbours in Europe for prospective investors. Risks to sustained economic growth are still present in Eastern Europe and countries like Slovenia, Hungary and Croatia are all struggling to grow because of weak export growth, banks deleveraging and fiscal consolidation programmes, all by-products of the eurozone debt crisis.
Source: Euromonitor International from national statistics/Eurostat/OECD/UN/International Monetary Fund (IMF), World Economic Outlook (WEO)
Note: Data for 2013 are forecast.
Since the breakup of the former Soviet Union, countries in Eastern Europe have been going through a period of convergence, whereby their growth levels tended to be higher than their developed counterparts as real growth began from such a low base. The global financial crisis of 2008-2009 couldn’t have come at a worse time for some of them as this meteoric growth was already cooling. Immediately, Western banks that were the primary sources of credit for Eastern European businesses and consumers began to deleverage in order to bolster their balance sheets at home which led to subdued credit growth and a collective slowdown in the eastern economies.
Source: Euromonitor International from national statistics/Eurostat/OECD/UN/International Monetary Fund (IMF), World Economic Outlook (WEO)
Note: Data for 2013 are forecast.
In order to ensure that these economies didn’t get completely steamrolled by the eurozone debt crisis, governments have had to adopt definitive policies to remain competitive and attract investment from elsewhere.
Eastern European countries have learned from their neighbour’s mistakes and are becoming dynamic, outward-looking economies. This process may ultimately slow deeper integration with the rest of Europe but it will ensure that these countries achieve sustainable, long-term growth.