The November 2018 forecast by the Vienna Institute for International Economic Studies (WIIW) continues to show robust growth in most Central and Eastern European countries. Tight labour markets are causing significant wage increases. As in Austria, this is having a positive effect on consumption, but could present a challenge for future growth in the medium term. With the exception of Croatia (2.6%), the Central and Eastern European (CEE) countries in the EU are expected to record real GDP growth rates of at least 3% in 2019. Slovakia, in particular, stands out for an expected growth rate of 4.1%, which is also an increase compared to 2018. According to WIIW, the average GDP growth rate of 3.4% expected for the CEE countries in the EU is almost the same as the growth of 3.5% expected for the Western Balkans in 2019.
As WIIW summarises in its analysis, the overall outlook remains positive for the region, although with a considerably higher level of risk due to, among other things, the intensification of the trade conflict between the US and China and a reduction in the EU budget after Brexit. WIIW confirms that the region in general is still on a path of convergence with Western Europe, although at a slower pace due to a weakening of the external environment.
Based on the forecasts currently available, VIG expects growth rates to be considerably higher in the CEE markets than in Western Europe, so that the insurance industry will continue to show dynamic growth in the CEE region in 2019.