Erste Bank Group anticipates an economic slowdown for 2020 in most CEE countries due to the coronavirus situation. The bank’s report mentions a negative scenario as well, which would result in a massive recession in the region.
The report published by Erste Bank emphasized that CEE countries have introduced preventive measures (such as closing down schools, canceling events, closing restaurants, etc.) relatively early but the effects still have to be seen with some delay. Because of the impacts of the government measures the CEE economies are expected to slide into recession this year.
Erste Bank estimates that Slovakia will have a GDP growth of -1 percent, while the Czech GDP is expected to drop by 0.5 percent. Croatia is likely to stagnate, while growth dynamics in Hungary, Poland, and Serbia are seen around 1%. Erste Bank is still quite optimistic regarding Romania, where it still expects growth of nearly 2 percent for 2020. The average growth forecast for the eight CEE countries stands currently at 0.8%, which is the lowest figure since 2012.
A more negative scenario is also mentioned by Erste Bank. This would entail a longer period of corona-related government measures and as a result, economies would run at only 80 percent of their common utilization on average in 2Q20. This gloomy scenario would lead to about a 2.9 percent contraction of CEE economies in 2020.
