The Vienna Institute for International Economic Studies (wiiw) forecasts that the Albanian economy will grow by 3.8% this year and 3.9% next year.

The Vienna Institute in a recent publication says that for 2025, the wiiw forecasts average growth of 2.8% for EU members, a minimal downward revision of 0.1 percentage point compared to last autumn.

“Growth in 2026 should be similar, at 2.7%, which also represents a slight downward adjustment of 0.3 percentage points. This means that both this year and next, the EU members of Central, Eastern and Southeastern Europe are likely to grow at about double the rate of the euro area (2025: 1.2%; 2026: 1.4%),” the report says.

The report noted that even though the return of Donald Trump as US president is creating great uncertainty and the international environment remains difficult, growth in most economies of Central, East, and Southeast Europe will pick up in 2025 – especially in the EU member states. This is shown by the new winter forecast by wiiw for 23 countries of the region. ‘However, this assumes that Trump does not immediately impose high tariffs on the EU and that he does not grant Putin an easy victory in Ukraine by abandoning the country and cutting military and financial aid to it,’ says Richard Grieveson, Deputy Director of wiiw and lead author of the winter forecast. ‘We are assuming this scenario.’

For 2025, wiiw forecasts average growth of 2.8% for the EU members of the region, a minimal downward revision of 0.1 percentage points compared to last autumn. Growth in 2026 should be similar, at 2.7%, which likewise represents a slight downward adjustment of 0.3 percentage points. This means that both this year and next, the EU members of Central, East, and Southeast Europe are likely to grow at about twice the rate of the euro area (2025: 1.2%; 2026: 1.4%), thus continuing their economic catch-up process.

Industry in key countries of the region, such as Poland, Czechia, Slovakia, Hungary and

Romania (which is closely intertwined with Germany), is struggling because of the ongoing recession in German manufacturing. However, growth in those countries continues to be driven by strong private consumption, thanks to robust real wage increases. ‘People are spending the additional disposable income, which is boosting the economy,’ explains Grieveson. Poland will be the frontrunner in terms of growth among the eastern EU member states, both this year (3.5%) and next (3.0%); it will be closely followed by Croatia (2025: 3.1%; 2026: 3.0%). The six countries of the Western Balkans will expand comparatively sharply, by an average of 3.5% in 2025 and 2026, while Turkey will also grow by 3.5% in 2025, followed by 4.5% in 2026.

The outlook for war-torn Ukraine is becoming somewhat gloomier. wiiw is forecasting growth of 3% for 2025 – a downward revision of 0.3 percentage points – although much will, of course, depend on Trump’s Ukraine policy. In the case of aggressor Russia, last year’s robust growth (3.8%) is likely to halve to just 1.8% this year. The same will apply to the autocratically ruled Belarus, under President Alexander Lukashenko, which is closely bound up with the Russian war economy and is expected to grow by just 2% in 2025, following growth of 4% last year.