Central and Eastern Europe survived 2020 better than Western Europe

The countries of Central and Eastern Europe (CEE) and selected countries of Southern Europe managed the pandemic year 2020 economically much better than the western member states of the European Union, but partly at the expense of public health. The Vienna Institute for International Economic Analysis (WIIW) expects economic growth in Eastern Europe at 3.8% this year. "Our analyzes show that Eastern Europe overcame the pandemic relatively well in 2020," APA quoted WIIW spokesman and study co-author Richard Grieveson as saying. The weighted real gross domestic product (GDP) in the 23 countries analyzed fell by an average of 2.3%. The economic downturn caused by the new coronavirus thus reached only a third of the level in the euro area. Anti-pandemic measures were not as strict in winter as during the first wave of the pandemic; more people went to work, either of their own free will or out of necessity. On the other hand, many CEE countries quickly took strict action at the beginning of the pandemic and had it relatively well under control. The pandemic and the lessons learned from the financial crisis ten years ago also helped the region cope with the pandemic. The decline in real GDP in Eastern Europe was significantly lower last year than in 2009 after the global financial crisis, when economic growth in the region fell by 5.6%. This time, the countries supported the economy with state aid and low interest rates. However, WIIW also points to regional differences. Eastern European EU Member States and the Western Balkans experienced more pronounced economic downturns last year than in 2009. By contrast, the recession in the Commonwealth of Independent States (CIS) and Ukraine was less pronounced last year than in 2009. In general, countries with a larger service and tourism sector, such as Italy, Spain, Croatia and Montenegro, have been hit hardest by the pandemic crisis. "Only Montenegro and Croatia have fallen more sharply than the eurozone," Grieveson told the APA. "Moldova is about the same as the eurozone." However, the WIIW expects the economic recovery to slow this year due to a significant winter increase in the number of infected people. "It is therefore unlikely that above-average economic growth will be repeated in the region this year compared to Western Europe," says Grieveson. Over the next three years, WIIW expects an economic recovery for all 23 Eastern European countries, but with large differences in speed. While Serbia and Turkey should soon return to the path of economic growth, countries such as the Czechia, Croatia, Bosnia and Herzegovina and Moldova will reach the pre-crisis level of GDP in 2022, Montenegro only in 2023.