Skip to main content

Diverging outlook as war in Ukraine drags on

Most economies in Central and Eastern Europe will experience stronger GDP growth in 2026 as external demand picks up and fiscal policy is kept loose (or loosened), while Russia’s economy will stagnate amid low oil prices as well as war and sanctions pressures. Softer inflation will allow for more interest rate cuts in some parts of the region than we previously expected, but most of our monetary policy forecasts still are on the hawkish end of analysts’ expectations.