Budapest, Hungary – Although Central European economies remain among the top growing in the EU in 2020, the latest forecasts confirm that Visegrad countries’ economic boom may well be over.
Polish and Hungarian growth rate slowing down
With an estimated growth rate of 3.3% and 3.2% in 2020 respectively, Poland and Hungary are poised to be the fourth and fifth fastest-growing economies in the EU this year, according to the European Commission’s Winter Forecast released this week.
Only Malta (+4%), Romania (+3.8%) and Ireland (+3.6%) are expected to grow at a faster pace, according to the EU’s executive.
Although remaining among the top-performing economies in the bloc, both Poland and Hungary are seeing their growth rates slow down, fast. In 2018 and 2019, the Polish economy had reported a year-on-year GDP growth rate of +5.1% and +4% respectively.
The slowdown of Hungary’s economy appears even more brutal, dropping from 5.1% and 4.9% in the past two years to 3.2% and 2.8% in 2020 and 2021.
An even weaker growth in Czech Republic and Slovakia
After growing by 2.8% and 2.5% in 2018 and 2019, the Czech economy is also slowing down, albeit more progressively, with an estimated GDP growth of 2.1% in 2020, before leveling up at +2.2% the following year.
Slovakia has experienced an even sharper drop, with the GDP growth rate falling from +4% in 2018 to 2.3% last year. European Commission experts believe the Slovak economy will further decelerate to 2.2% in 2020, and pick up again with in 2021 (+2.6%). According to data released by the national statistical office, Slovakia’s growth rate has reached its lowest level since 2013.
EU economy to grow by 1.4% in 2020 and 2021
Predictions are grim for the EU’s economic powerhouses, with the Italian, German and French economies poised to expand by only 0.3%, 1.1% and 1.1% respectively. The European Union as a whole should grow by 1.4% in 2020 and 2021, according to the European Commission.
Despite noting that the European economy remains on a steady and stable path, European Commission vice-president Valdis Dombrovskis warned that “we should be mindful of potential risks on the horizon”, including “a more volatile geopolitical landscape coupled with trade uncertainties”.