Bloomberg announced that a significant crisis would soon affect Romania, Hungary and Poland.
Eastern Europe is feeling the effects of the Ukrainian conflict as inflation and high-interest rates take a heavy toll, and economies stagnate. Although Poland and Romania seem to cope with it, a recession has been announced by experts to come.
After an incredible growth at the start of the year, the economies of Eastern Europe are already showing signs of instability due to the war. Bloomberg reports that among the few nations that have maintained their growth are Romania and Poland.
Bloomberg analysts predict a steep decrease for Hungary, while the economies of Poland and Romania are anticipated to slow down in the upcoming quarter.
Forecasts show that the area is gradually approaching a recession, which may occur in the second part of 2022. The major issues facing Eastern Europe are inflation, the energy crisis exacerbated by Russia’s erratic supply, and drought, which could impact the region’s agriculture.
Hungary is facing the worst-case scenario, where it is impossible to avoid a quarterly decline. Viktor Orban put into place several populist policies to win the elections in April, which would eventually impact the nation’s economy. The Czech Republic unexpectedly avoided a quarterly contraction when it announced GDP figures at the end of July. The Czech Republic’s GDP increased by 0.2% from the previous quarter and 3.6% in the prior year.
However, challenges for Eastern Europeans started to multiply. Interest rates reached their highest point since the 2008 financial crisis, and electricity prices set a new record. The optimism drops dramatically when the recession seems to be postponed rather than prevented.