Eastern Europe is a budding economic powerhouse in the world’s wealthiest continent, but no one seems to notice it. Here is an article from Quartz for some insights:
Germany has long been the engine that drives the EU’s economic growth, but for the past few years it has been outpaced by countries further east—most notably Poland, Romania, and the Czech Republic.
The three largest eastern EU members by GDP are experiencing a “Goldilocks moment” of high economic growth, low unemployment, and manageable inflation of around 2%, according to Diana Amoa, a money manager at JPMorgan Asset Management who specializes in emerging market debt.
The IMF now forecasts that “emerging and developing Europe” economies to grow 4.5% this year, upping their prediction by 1.5 percentage points from six months ago. This increased optimism is based, in part, on bumper growth in the second quarter of 2017, when Romania’s economy increased 5.7% versus a year earlier, the Czech Republic’s by 4.7%, and Poland’s by 4.4%. By comparison, the EU average was 2.4% growth over the same period.
Why are these countries growing so quickly?
All of these economies are still heavily reliant on manufacturing, exporting much of their production to the rest of the EU. For example, the Czech Republic—er, Czechia—has the lowest unemployment rate in the EU and about 35% of the Czech labor force is employed in manufacturing, the highest proportion of any EU country. When Europe is growing, demand for the things made in these economies grows. Often this means cars: automakers including Toyota, Volkswagen, and Peugeot have factories in the Czech Republic. Romania’s largest exporter is Dacia, a subsidiary of French car company Renault.
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