CEE economies could return to fast growth: report
December 18, 2013
Central and Eastern European countries have the potential to return to their pre-crisis economic growth rates—but they need to update their growth model, according to a report by management consulting firm McKinsey.
CEE economies need to pursue three growth strategies, the report says: expanding and upgrading exports; raising productivity in lagging domestic sectors; and restoring flows of foreign direct investment and increasing domestic saving rates to fund investment.
The report, A New Dawn: Reigniting Growth in Central and Eastern Europe, considers eight nations —Bulgaria, Croatia, the Czech Republic, Hungary, Poland, Romania, Slovakia, and Slovenia, all of them EU member states.
Central and Eastern Europe was one of the fastest-growing regions before the financial crisis, with GDP expanding at an average annual rate of 4.6 percent from 2000 to 2008, the report notes.
Since the financial crisis the CEE region—like other parts of the world—has struggled to reignite growth.
However, the region’s great underlying strengths, such as its educated yet affordable work force, a stable macroeconomic environment, and a strategic location, remain intact, according to McKinsey.