Written by Tünde Tancsics and Dóra Barát – ELTINGA-EECFA Research
Similarly to every summer, this summer too we have looked at how the European Commission sees our countries. Here is how GDP, investment and construction investment forecast have changed in the past half year.
Between Autumn 2023 and Spring 2024 economic outlook has improved for the majority of countries in the Eastern and Central Eastern European region (EECFA countries) for 2024-2025. Exceptions only included Türkiye, Romania and Hungary (this latter is covered by Euroconstruct), but the deterioration of the outlook was minimal. Expected GDP growth also decreased in case of the EU and the Eurozone.
Economic growth in the examined countries is expected to be between 2.3% and 3.9% by 2024-2025. The largest GDP expansion is related to Serbia, while Russia’s economy may grow least. At the same time, the expansion in the countries of the region is set to be much higher than in the EU and the Eurozone where projected GDP growth is only 1.1% and 1.3%, respectively.
Projected gross fixed capital formation (GFCF) growth rate for 2024-2025 sank in the majority of the countries by Spring 2024 from the previous level in Autumn 2023 with the only exceptions being Russia and Serbia. In Russia, a slight increase was seen from Autumn 2023 to Spring 2024. Prospects in Serbia significantly improved and next to Romania, its growth rate became the highest (6,45%) in the Eastern- and Central Eastern-European region (EECFA countries).
Expected GFCF (investment) growth is also high in Hungary, 4.9%, while for the other countries in the region, projected GFCF increase in 2024-2025 is between 3.05% and 3.6%. In the EU and the Eurozone, a much more modest expansion is estimated than in the region; GFCF prospects decreased from Autumn 2023 to Spring 2024, and they are only 1.15% and 0.85%.
Growth rate for investment into construction for 2024-2025 improved in Croatia, Hungary and Bulgaria, while in Romania, Slovenia, and in the EU and the Eurozone the outlook deteriorated from Autumn 2023 to Spring 2024. When it comes to the EU, growth is foreseen to be close to zero, whereas in the Eurozone a slight drop is projected for 2024-2025. The predicted growth for investment into construction in Spring 2024 was the highest in Romania (8.05%), followed by Hungary, Bulgaria, Slovenia (between 4.1% and 4.4%) and Croatia (2.45%).
This above represents the Commission’s view and it is different from ours at some point. It might be because our focus is exclusively on construction. For each segment we come up with an individual story and this is how the total construction market is formed. The latest predictions are in the 2024 Summer EECFA Construction Forecast Reports. Sample report and order: eecfa.com
As we see, Türkiye and Croatia could be top performers, while Russia and Romania are forecast to shrink. Although the Ukrainian growth rate is impressive it is because the market is coming back from a very low level.