The pre-crisis boom years in Central and Eastern Europe (CEE) led to an erosion of external competitiveness which is one reason why the recovery from the 2008-09 crisis has been so sluggish. But following five years of weak wage growth and currency depreciation, it looks like the region has managed to restore lost competitiveness, removing one of the key impediments to growth. In the near-term, the outlook for the region will hinge on developments in Western Europe. But so long as the euro-zone manages to muddle through, the CEE economies could see a period of sustained growth over the coming years.
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