On 31 May the OECD published its spring economic projections. In this webinar we focused on the situation in Central and Eastern Europe and discussed economic perspectives for the Czech Republic, Hungary, Poland, Slovakia and Slovenia.
Mame Fatou Diagne | OECD Economics Department, Paris
Isabell Koske | OECD Economics Department, Paris
Maja Bednas | Institute of Macroeconomic Analysis and Development, Slovenia
Michal Horváth | National Bank of Slovakia
Jakub Matějů | Czech National Bank
Jakub Sawulski | Polish Economic Institute
Moderation: Matthias Rumpf | OECD Berlin Centre
Recording of the event
Summary of the discussion:
- The global economic outlook is brightening but the recovery is uneven. This is also the case within the CEE region.
- CEE countries are highly exposed to shifts in foreign demand and benefit from a rebound in the trade in goods, while the export of services is still much below pre-crisis levels.
- Inflation has picked up in most countries, reflecting higher food and fuel prices, a surge in shipping costs and one-off factors such as tax changes. Many of these factors should tapper off in the near term but some supply-related pressures could take time to ease.
- Labour markets in the region have been resilient but the pandemic reinforced the shift away from low and mid-level qualifications towards the highly skilled occupations. This is raising concern about growing inequality. Governments should strengthen active labour market policies and promote participation in adult training.
- More fiscal support for the recovery will be needed. However, CEE-countries have the fiscal capacity to offer the needed short-term support, and the recovery plans provide opportunities to invest in the future. Long-term challenges will call for fiscal adjustments when the recovery is firmly underway, but planning for fiscal sustainability can start now.
- A fast vaccination campaign is the key precondition for a smooth recovery. The possible failure to vaccinate their populations is a key downside risk for CEE-countries as it could cause another Covid-19 wave. With some CEE-countries already having more availability of vaccines than demand, governments need to take this issue seriously.
- Participants highlighted that labour shortages and an aging labour force are major bottlenecks for economic development in all CEE-countries. Policies should accelerate structural reforms and promote the labour market participation of women, older and foreign workers, enhance worker mobility and upgrade skills.
No Ordinary Recovery. Overview over the OECDs Economic Outlook May 2021. (31 May 2021).
Economic Outlook May 2021. Full report in the OECD iLibrary. (31 May 2021).
Poland Economic Snapshot. Economic Forecast Summary and Country Note. (31 May 2021).
Czech Republic Economic Snapshot. Economic Forecast Summary and Country Note. (31 May 2021).
Slovenia Economic Snapshot. Economic Forecast Summary and Country Note. (31 May 2021).
Slovak Republic Economic Snapshot. Economic Forecast Summary and Country Note. (31 May 2021).
Hungary Economic Snapshot.Economic Forecast Summary and Country Note. (31 May 2021).