EECFA countries in the European Commission’s 2018 Spring Macro Forecast

Before the publication of the 2018 Summer EECFA Forecast Report, the European Commission released its spring forecast, revealing the prospects for almost all EECFA member countries. Let us highlight the main changes in the prospects over the past half year.

Written by Aron Horvath, PhD, EECFA Research, ELTINGA

Chart 1. Revision of GDP growth forecasts for EECFA countries, Hungary and the EU (average 2017-2018-2019) Source: European Commission

Chart 1 shows that GDP growth is higher in the region than in the EU, so the economic outlook is still better in the Eastern region. Looking at the individual level, the only exception is Russia, where economic growth is set to remain under 2 percent according to the Commission. As for the rest of the countries in the region, the expected growth is between 2.75 and 5.5 percent. Turkey and Romania lead the group with an over 5 percent forecasted economic growth.

Among EECFA countries, Slovenia, Turkey and Romania have witnessed their economic outlook having improved since the latest forecast in Autumn 2017. On the other hand, the forecasted GDP growth slowed down in a few EECFA member countries. In case of these countries the shrinkage was minor, though, and economic outlook is still positive.

Chart 2. Revision of Gross fixed capital formation growth, and if available, GFCF into construction growth (average 2017-2018-2019) Source: European Commission

Chart 2 shows gross fixed capital formation growth in the EU and in EECFA. It indicates that the expected GFCF growth is faster in the EECFA region than in the EU. Thanks to the pro-cyclical specificity of the investment, the advantage of Eastern countries is even bigger than in the case of GDP. Beyond the Euroconstruct member Hungary’s boom, among EECFA countries Slovenia has the highest GFCF prospects; almost 10 percent. Only Russia shows slower prospects compared to the EU. Construction’s share in total investment in EECFA countries are between 54 and 63 percent with Turkey having the highest rate.

One thought on Turkey

Our assessment of the expected development on Turkey’s construction market is significantly different from the Commission’s view. Instead of revising upward, we have revised our outlook downward.

On the one hand, there are methodological differences between the Commission’s and our forecast. In EECFA we apply a bottom-up approach, each segment of construction is assessed individually, and the forecast result for the total market comes from the aggregation of the parts.

Besides, the cut-off date for taking new information into account in this European Economic Forecast was 23 April 2018 while in EECFA this date was 4 June. During this period the macro environment deteriorated, the Turkish lira depreciated further, inflation continued to edge up, triggering the Central Bank to increase its policy rate to 16.50% on 1 June. (Since then, another rate hike, to 17.75% was announced on 8 June.)

Our forecast on the total construction market of Turkey (and 7 other EECFA countries) can be seen on this visualization or the summary of our latest forecast can be read in this article.

Map 1. EECFA Construction Forecast – 2018 Summer

For segment level forecast you may consult with our reports, please visit us at



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