Overheating is among risks for Central-Eastern Europe

Subject The economic outlook for the five leading CEE economies. Significance First-quarter GDP outturns in Central-Eastern Europe (CEE) were mixed. While Poland and Hungary surprised on the upside, the pace of economic expansion was less robust in the Czech Republic and Romania. After a strong cyclical upswing in GDP last year, economic growth appears to have peaked in the first quarter and economic growth is likely to moderate in 2018. Impacts In 2018, Romania, Slovakia and Poland will grow the fastest; the Czech Republic and Hungary will grow less robustly. With some economies managing to absorb EU funds at a faster pace than others, growth patterns are expected to diverge further. In Poland and Hungary, monetary conditions are expected to remain ultra-loose until at least end-2018. Weaker GDP growth rates are expected next year, particularly in the absence of structural reforms to tackle labour shortages.