THE NEW EUROPEAN UNION MEMBER STATES: STRONG ECONOMIC GROWTH, INCREASING RISKS
THE NEW EUROPEAN UNION MEMBER STATES: STRONG ECONOMIC GROWTH, INCREASING RISKS

Summary/Abstract: Economic activity in the new EU member states remained buoyant in 2007 as strong GDP growth continued and even accelerated in some of the countries, including in the biggest economy of the region, Poland. GDP growth averaged 6.0 per cent for the group as a whole. Hungary did not share in the strong performance as its economy grew by a mere 2 per cent in response to fiscal tightening. The vibrant activity elsewhere was accompanied, however, by weakening indicators of macroeconomic stability, exacerbating earlier concerns of an overheating in some of the economies. Growth in the region is expected to slow to about 5.4 per cent in 2008 as the economies face labor-supply constraints, and aggregate demand is expected to cool in line with slowing credit expansion.

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