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Monthly Report No. 7-8/2022

Author

Listed:
  • Vasily Astrov

    (The Vienna Institute for International Economic Studies, wiiw)

  • Alexandra Bykova

    (The Vienna Institute for International Economic Studies, wiiw)

  • Rumen Dobrinsky

    (The Vienna Institute for International Economic Studies, wiiw)

  • Selena Duraković

    (The Vienna Institute for International Economic Studies, wiiw)

  • Richard Grieveson

    (The Vienna Institute for International Economic Studies, wiiw)

  • Doris Hanzl-Weiss

    (The Vienna Institute for International Economic Studies, wiiw)

  • Gabor Hunya

    (The Vienna Institute for International Economic Studies, wiiw)

  • Branimir Jovanović

    (The Vienna Institute for International Economic Studies, wiiw)

  • Niko Korpar

    (The Vienna Institute for International Economic Studies, wiiw)

  • Sebastian Leitner

    (The Vienna Institute for International Economic Studies, wiiw)

  • Isilda Mara

    (The Vienna Institute for International Economic Studies, wiiw)

  • Bernhard Moshammer
  • Olga Pindyuk

    (The Vienna Institute for International Economic Studies, wiiw)

  • Sandor Richter

    (The Vienna Institute for International Economic Studies, wiiw)

  • Bernd Christoph Ströhm

    (The Vienna Institute for International Economic Studies, wiiw)

  • Maryna Tverdostup

    (The Vienna Institute for International Economic Studies, wiiw)

  • Nina Vujanović
  • Zuzana Zavarská

    (The Vienna Institute for International Economic Studies, wiiw)

  • Adam Żurawski
Abstract
Summer Forecast Update Impressive Resilience is Unlikely to Last Economic Forecasts for Eastern Europe for 2022-24 Despite impressive resilience among CESEE economies so far, intensifying supply-chain bottlenecks, soaring commodity prices and a decrease in external demand will weigh on growth during the second half of 2022. Consumer and business confidence is declining, and high inflation will increasingly eat into real household incomes. However, with the exception of the CIS and Ukraine, CESEE is expected to avoid a recession in 2022. Russia appears to be more resilient in 2022 than we had previously expected, but this is mainly because the full impact of the oil embargo will be felt in 2023. For Ukraine and Moldova, being granted EU candidate status represents a decisive step towards their EU integration; although the accession process may last a long time, the status will provide a stronger anchor for the reform process in the two countries than previous bilateral institutional arrangements. All forecasts in this environment are subject to a very high degree of uncertainty, reflecting the unpredictability of the future course of the war. Downside risks are high, owing in particular to the potential for a further reduction in Russian gas supplies during the winter, and the possibility that high inflation and tighter monetary policy will cause financial turbulence. CESEE Overview by Olga Pindyuk High inflation spurred by Russia’s war in Ukraine is causing slower growth in CESEE, but a recession should still be avoidable for most. Challenges for Austria in light of the war in Ukraine by Bernhard Moshammer Due to its high reliance on Russian energy, Austria is vulnerable to a winter gas shut-off, but the prospects for labour market integration of Ukrainian refugees are fairly good. Country updates Albania Inflationary pressure is holding back consumption and growth by Isilda Mara Belarus Sliding into a deep recession by Rumen Dobrinsky Bosnia and Herzegovina Political turbulence and inflation take their toll on the economy by Selena Duraković Bulgaria A new political crisis raises economic uncertainty by Rumen Dobrinsky Croatia No respite in sight by Bernd Christoph Ströhm Czechia Headwinds proving strong and persistent by Zuzana Zavarská Estonia Clouds are gathering as autumn approaches by Maryna Tverdostup Hungary The emergency brake is being applied by Sándor Richter Kazakhstan High oil price is favourable for growth, but geopolitical risks remain by Alexandra Bykova Kosovo Remittances come to the rescue by Isilda Mara Latvia War-induced slump kept in check by Sebastian Leitner Lithuania Reduced purchasing power of households amid a tightening labour market by Sebastian Leitner Moldova Recession ahead by Gábor Hunya Montenegro Inflation will weigh on growth by Nina Vujanović North Macedonia When inflation runs out of control by Branimir Jovanović Poland So far so good by Adam Żurawski Romania Adverse impacts of inflation and war come with a delay by Gábor Hunya Russia Currency rebound delays the peak of the crisis by Vasily Astrov Serbia Still standing by Branimir Jovanović Slovakia Negative risks cloud the outlook by Doris Hanzl-Weiss Slovenia Regional outperformer by Niko Korpar Turkey Foot to the floor, hoping for the best by Richard Grieveson Ukraine Persevering in time of war by Olga Pindyuk

Suggested Citation

  • Vasily Astrov & Alexandra Bykova & Rumen Dobrinsky & Selena Duraković & Richard Grieveson & Doris Hanzl-Weiss & Gabor Hunya & Branimir Jovanović & Niko Korpar & Sebastian Leitner & Isilda Mara & Bernh, 1970. "Monthly Report No. 7-8/2022," wiiw Monthly Reports 2022-07-08, The Vienna Institute for International Economic Studies, wiiw.
    • Handle: RePEc:wii:mpaper:mr:2022-07-08
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    File URL: https://wiiw.ac.at/monthly-report-no-7-8-2022-dlp-6246.pdf
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    References listed on IDEAS

    as
    1. Vasily Astrov & Robert Stehrer & Zuzana Zavarská, 2022. "Recovery and Resilience Facility Funding in the Visegrád Countries and its Impact on Austria," wiiw Policy Notes 56, The Vienna Institute for International Economic Studies, wiiw.
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      Keywords

      Keywords: CESEE; economic forecast; Central and Eastern Europe; Western Balkans; EU; euro area; CIS; Austria; war in Ukraine; Ukrainian refugees; energy dependence; EU accession; COVID-19; EU Recovery and Resilience Facility; economic growth; labour markets; inflation; stagflation; monetary policy; fiscal policy;
      All these keywords.

      JEL classification:

      • E20 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - General (includes Measurement and Data)
      • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
      • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
      • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
      • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
      • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
      • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
      • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
      • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
      • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
      • F31 - International Economics - - International Finance - - - Foreign Exchange
      • H60 - Public Economics - - National Budget, Deficit, and Debt - - - General
      • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
      • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
      • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
      • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
      • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe
      • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries
      • P24 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - National Income, Product, and Expenditure; Money; Inflation
      • P27 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Performance and Prospects
      • P33 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - International Trade, Finance, Investment, Relations, and Aid
      • P52 - Political Economy and Comparative Economic Systems - - Comparative Economic Systems - - - Comparative Studies of Particular Economies

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