BNP Paribas highlights that Central European economies are in good shape despite a declining population and working age group. Banknotes include continued support from EU funds, strong productivity gains relative to wages, and a highly educated workforce. It also identifies medium-term risks to competitiveness and potential growth from worsening demographics by 2030.
Demographic headwinds versus structural support
“By 2030, demographic trends are expected to worsen further, raising concerns about potential wage growth pressures, reduced competitiveness and potential structural weakening of growth.”
“Despite demographic headwinds, the economies of Central Europe have performed quite well so far, largely due to several key factors:”
“Support from EU funds is expected to continue, and these countries will remain net beneficiaries in the medium term.”
“Over the past two decades, productivity growth has outpaced wage costs.”
“This has enabled Central European countries to gain market share in Germany as well as achieve remarkable economic convergence with developed economies.”
(This article was created with the help of an artificial intelligence tool and reviewed by an editor.)
