Central Europe may emerge at the other end of the coronavirus pandemic with renewed strength, analyst Dániel Deák concludes in an article on think-tank 21st Century Institute’s website.
“As a result of effective political leadership and steady economic fundamentals, Hungary, similarly to the other countries of the region, will suffer a less severe economic setback as the most affected Western and Southern European countries, which were in very in bad shape to begin with,” Deák writes. “Thanks to his, the political weight of Hungary and the Visegrad Four in European negotiations could improve and the region could emerge stronger from the crisis.”
Deák points out that data from the European Stability Index for the past four years (2016-2019) indicates that this period was one of sustained growth for all regional countries, demonstrated by the fact that of the top ten countries in the stability index, five are from Central Europe, which include Hungary, Poland, Czechia, Slovenia and Slovakia while another three — Luxembourg, Denmark, and Ireland — are from Western Europe. The last two are Sweden and Malta, which are from the north and south of the continent.
The only Central European country which landed towards the tail end of the list is Romania, where economic growth was just as impressive as in the other countries of the region, but it is marred by political instability. In the past ten years, the country had no less than 14 consecutive governments.
Deák added that first quarter GDP data, showing a decline of 5.4 percent in France, 4.8 percent in Italy and 4.1 percent in Spain stand in contrast to the first quarter data showing a rise in GDP in most of the Central European region, further reinforcing the opinion that the region is Europe’s economic growth engine.
In addition, the countries of the region have also had relatively excellent outcomes in the handling of the coronavirus pandemic, both in terms of infections per 100,000 inhabitants and death rates, managing without exception to keep the infection rate flat.
According to the International Monetary Fund’s (IMF) April economic outlook, economic contraction in Europe will be the least severe in Malta, followed by Hungary.
Additionally, the IMF also expects that only six member states of the European Union will manage to post higher growth next year than this year’s decline, none of which are from Western Europe.
“This data all point towards that the Central European countries with a stable economic foundation will emerge reinforced from the current crisis,” Deák writes.
Title image: Hungarian Prime Minister Viktor Orbán.