By Gergely Szakacs
BUDAPEST (Reuters) – The economies of Central Europe, strongly dependent on exports, are faced with the risks linked to the slowdown in global trade growth and the threats to customs duties, which could be attenuated by reforms and the abolition of trade barriers that remain in the EU, the International Monetary Fund (IMF) said on Tuesday.
Central European countries are among the most dependent on foreign trade among the twenty-seven, the share of exports in gross domestic product (GDP) ranging from 92% to Slovakia to 69% in the Czech Republic, according to Eurostat data for 2023.
Only Romania, whose exports represent 39% of GDP, is below the EU average.
The US President Donald Trump’s project to impose customs duties of 25% on imports from the block is likely to harm the growth of the region, even if Poland, the largest economy in Central Europe, is considered less exposed, said S&P Global last week.
“In recent decades, the Peco region (Central Central and Eastern European countries) has largely benefited from its growing participation in global value chains,” Gottlieb’s main representative of the IMF for Central, Eastern and Southeast Europe told Reuters.
“However, this model is faced with winds, because global trade growth began to slow down, going from 6% in 2000-2019 to 3% in 2022-2024,” he said in an email sent to Reuters.
According to Geoff Gottlieb, central European countries must focus on what is under their control, continuing reforms to stimulate productivity and increase the standard of living, while putting pressure for the elimination of existing “significant” trade barriers within the EU.
He also said that efforts were necessary to ensure that companies in the region are not faced with unnecessary costs when they are trying to be competitive abroad, adding that any new industrial policy should be coordinated at the EU level.
According to a study by the IMF published in 2024, the main commercial barriers that hinder the region are precarious border infrastructures, the rules relating to public contracts or the absence of harmonized rules within the EU. The services sector suffers from particularly high trade barriers, according to the report.
(Report Gergely Szakacs, Diana Mandiá, edited by Kate Entringer)
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