In 2024, Central Europe and the Western Balkans experienced varied economic developments, influenced by global trends, regional policies, and domestic reforms.
The region, encompassing countries like Poland, the Czech Republic, Hungary, and Slovakia, demonstrated resilience amid global economic challenges. Economic growth in these nations was primarily driven by robust consumer spending and increased investments, particularly those funded by the European Union. Projections indicated a GDP growth acceleration to 2.8% in 2025, supported by stronger consumer spending and EU investments.
Poland, in particular, stood out as a significant success story. From 1990 to 2023, Poland’s GDP per capita surged from $6,200 to $48,000, reflecting effective economic policies and strategic utilization of EU funds. The country leveraged EU funds to enhance infrastructure and attract foreign investment, with Special Economic Zones (SEZs) playing a pivotal role by offering tax breaks and support to investors. Poland’s manufacturing, construction, and rapidly growing services sector, especially in financial and tech industries, continued to fuel growth. Despite initial emigration, many Poles returned with new skills to bolster the economy. Poland’s democratic institutions have supported sustainable development amid political challenges. Looking ahead, Poland’s GDP growth is projected to remain strong, potentially outpacing the UK’s per capita income if current trends continue.
However, potential challenges loomed. S&P Global indicated that new U.S. policies, such as higher trade tariffs on the EU, could test Central European credit ratings. Additionally, uncertainties stemming from the Russia-Ukraine conflict might impact growth through weakened external demand in Western Europe. The Czech Republic, Hungary, and Slovakia, with their strong ties to the German automotive sector, were particularly vulnerable, while Poland’s diversified economy suggested a more resilient outlook.
The Western Balkans, comprising Albania, Bosnia and Herzegovina, Kosovo, Montenegro, North Macedonia, and Serbia, exhibited a positive economic trajectory in 2024. The World Bank projected regional growth to accelerate to 3.3% in 2024, up from 2.6% in 2023, driven by easing price pressures, rising credit availability, and resilient labor markets. This growth was supported by increased consumption and investment, particularly in the construction and services sectors.
To bolster economic integration and convergence with the European Union, the European Commission approved Reform Agendas for Albania, Kosovo, Montenegro, North Macedonia, and Serbia. These agendas outlined socio-economic and fundamental reforms to be undertaken between 2024 and 2027, paving the way for payments under the EU’s €6 billion Reform and Growth Facility.
Additionally, the EU’s Growth Plan for the Western Balkans aimed to strengthen economic ties with the EU, the region’s largest trading partner, and implement reforms to enhance economic integration within the Western Balkans. The plan included a six-billion-euro investment to help the region improve integration with the EU single market by reducing border clearance times and modernizing payment systems.
Despite these positive developments, challenges persisted. The region remained vulnerable to sluggish global growth, a rebound in inflation, political uncertainty, and extreme weather events. Retaining the growth momentum required structural reforms, including those outlined in the European Union’s growth plan for the region.
In summary, 2024 was a year of economic growth and reform for both Central Europe and the Western Balkans. While Central Europe capitalized on consumer spending and EU investments, the Western Balkans focused on structural reforms and regional integration to drive economic progress. Both regions faced external challenges that required continued vigilance and policy adjustments to sustain and enhance economic growth in the coming years.
