The war in Ukraine is destroying the economic growth in the eastern part of the EU. Romania is a notable exception. Hungary is sinking into recession, Poland is arming itself, and Czechia is plunging into troubled waters

Bucharest, August 16, 2023 – The inevitable is happening before our eyes. Despite all the optimistic estimates of national and international analysts, the national economies of Eastern Europe are having a hard time coping with the consequences of the war in Ukraine. Pushed from the back by the “strategic partner” – the US, states such as Poland and Czechia are beginning to suffer greatly from the war economy established by the governments in power in Warsaw and Prague.
The biggest impact on economic morale in Eastern Europe is the entry into technical recession of Poland. In the second quarter of 2023, the economy of this country decreased by 1.3% compared to the same quarter in 2022 and by 3.7% compared to the first quarter of 2023. Poland’s armament expenditures, which will reach this year over 3% of GDP, weakened the potential of an economy that had taken off until 2022.
The astronomical sums and the facilities granted by the government in Warsaw for the purchase of armaments have weakened the interest in sectors that represent the engine of the domestic economy. As a result, domestic consumption. Household spending was over 1.5% lower than last year. Analysts from one of the largest banks, PKO Bank, show that recent balance of payments data indicate a smaller contribution from net exports, and real imports have accelerated significantly.
As for Hungary, the country seems to be at a standstill. Viktor Orban’s duplicitous policy is proving bankrupt. Compared to the same period in 2022, in the second quarter of 2023, the GDP decreased by 2.3%, and in the previous quarter by 1.2%.
In his statement on the GDP data, Economic Development Minister Márton Nagy pointed out that “the war and sanctions have negatively affected the performance of the Hungarian economy, as they have caused a drop in consumption and a slowdown in investment. But the negative external economic environment, including the stagnation of the German economy, did not help either.”
The only exception in this sinister landscape is represented by Romania, whose GDP increased in the second quarter of 2023 by 2.7% compared to the same period in 2022, after the increase in the previous quarter was 2.9%.
The main factor of GDP growth was the increased volume of domestic consumption, as a result of policies to protect purchasing power taken by the government in Bucharest. Services and the increase in agricultural production are also positive growth factors. On the other hand, industrial production fell sharply, due to the dependence on the Western economies, especially the German one, which are in great difficulty.