Populist governments in the Balkans lag behind liberal rivals in economic growth

The wiiw analysis highlights a clear split in Central and Eastern Europe: liberal coalitions in Poland and Hungary are delivering solid economic performance, with Poland’s high-tech industry expanding and Hungary benefiting from a post-Orbán reform agenda that has lifted the forint and cut sovereign bond yields. Conversely, populist-led governments in the Czech Republic, Slovakia, Bulgaria, Romania and Serbia are expected to record slower growth, rising debt levels and stubbornly high inflation.

The report cites policy differences - technology adoption and productivity gains in the liberal states versus expansive public spending and weaker fiscal discipline in the populist ones - as the main drivers. It also notes that EU concerns over deficits have prompted formal procedures against Bulgaria, while Serbia’s growth under Aleksandar Vučić remains below earlier decades. Overall, wiiw warns that political uncertainty and trade imbalances could further hamper the economies of the populist-run nations.