EECFA countries in the European Commission’s 2020 Macro Forecast

Before the 2020 Summer EECFA Construction Forecast Report was published, the European Commission released its forecast for the economic prospects for EECFA member countries. The main changes in prospects between Autumn 2019 and Spring 2020 have been collected in this article.

Written by Bálint Parragi, EECFA Research, ELTINGA

In Spring 2020, the global economy as a whole has been hard hit and shrunk due to the coronavirus pandemic, marking the end of many quarters and years of economic growth. According to data depicted on Chart 1, every country’s GDP growth decreased, but not to the same extent.

The countries having experienced high GDP growth (higher than 2.5% per annum) in Autumn 2019 are still growing, but very much less than before. Romania and Bulgaria have the highest absolute decrease with approximately a reduction of 3% and 2.5%, respectively. The economy of Serbia and Euroconstruct member Hungary slowed down too, but not as drastically as that of their eastern neighbours, so they have the highest GDP growth among these countries. Where growth was less and reduction was the same, the crisis created a stagnating or even shrinking economic status such as in the Euro Area, the EU and Turkey. The Russian economy even suffered a significant negative shock with a value of -0.7% per annum. All in all, EECFA countries still have a higher GDP growth than the others.

Looking at the gross fixed capital formation data (Chart 2), the situation is a bit different, but decreases are general. According to expected GFCF growth, Serbia lost little to its previous period value, ranking high above all other states. While Romania experienced a moderate drop, annual GFCF growth has nearly come to zero in Hungary, Croatia, Slovenia, the EU (the Eurozone as well) and Russia. The greatest falloffs are connected to Bulgaria and Turkey whose previous period value was by far the lowest and the only negative value among the examined countries.

Total construction growth has been revised downward everywhere, but while in Romania and Hungary it stayed positive (3-4%), it has come to zero in Slovenia and turned into negative value in Bulgaria, around -5% per annum. Construction’s share in total investment in the EECFA countries ranges from 57% (Slovenia) to 62% (Romania), with Hungary and Bulgaria in between (61% and 59% respectively).

For construction segment level forecast, please consult with our latest reports issued on 29 June that can be purchased on eecfa.com

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