As the Eurozone’s Southern economies have switched to crisis-related divergence in the past decade, the economies of Central and Castern Europe (CEE), including Hungary’s economy, have become the bright spot of the European convergence story, according to a fresh article published on Financial Times.
Economists Guillermo Tolosa and Evghenia Sleptsova noted that CEE’s export share in GDP is today about 40 per cent, which is double the average of the southern periphery, more than double that of China and India, and higher on average even than that of the export powerhouse of Southeast Asia. The size of the export sector is a “key factor behind sustainable growth”, the authors claim, adding that CEE economies will buck the dangerous trend of “early de-industrialisation” owing to their “integration into dramatically expanding value chains around the globe and in Europe”.
The Central and Eastern European economies have experienced an “accelerated move up the production value chain” relative to historical precedents of emerging markets, and they have entered higher-value industries with complex productive structures, the economists say. However, they warn of the danger of demographic decline, which they describe as “a serious constraint” in the region.
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