The opportunity of Europe’s emerging economies
-
Loading... - Max Schneider
- 14 Feb 2023
- 70 Views
- 0 Like
- 0 Comment
A period of economic expansion for central Eastern Europe began at the end of the 20th century, only to be derailed by the recession in 2007 and the outbreak of Covid in 2020. While these events had a huge influence on the region’s countries that still have to pick up the pace if they’re to catch up with their Western European counterparts, the situation might just be turning for the better.
The current state of the central Eastern European economy
In terms of trade, this area of the continent has long specialised in manufacturing, especially machinery, appliances and equipment. In 2021, Poland and the Czech Republic exported machinery to neighbouring markets valued at nearly €77 billion and €63 billion respectively. Hungary’s main export was electronic machinery valued at €29.6 billion, while Slovakia’s biggest export was vehicles at €28.4 billion (Statista).
The importance of these industries is not only in the number of exports, but also their significant contribution to the countries’ employment. According to the International Labour Organization, 26.1% of the Czech Republic’s employed population works in manufacturing, followed by 24.9% of Slovakia’s and 21.2% of Hungary’s workforce. In both Romania and Poland, over 19% of the employed population works in manufacturing, placing these countries a long way above the 13% average for high income countries across the world.
The focus on manufacturing seems to have paid off in terms of GDP growth in the region – while the average GDP growth across the European Union in Q3 of 2022 was 0.3%, Romania and Poland scored a 1.3% and 1% increase respectively, outperforming Germany (0.5%) and Netherlands (-0.2%). This trend is expected to continue as we move into 2023 – the International Monetary Fund projections estimate that the advanced European economies will see a 0.6% growth, while the emerging European economies will see around 1.7% growth on average. Read More…
