Because of the slower-than-anticipated GDP growth in Q1 (+0.3% y\/y) and also accounting for high-frequency data signals for the second quarter, Erste Group has revised its full-year GDP growth forecast for this year to 1.3% from 1.8%. This is close to the government’s 1.4% revised forecast issued in May.\u00a0<\/p>\n
Due to the much-anticipated fiscal consolidation measures, which will likely be implemented later this year, consumption is expected to decelerate further in 2025. Investments will be a key driver for this year’s growth story and will be very important to follow the EU Funds absorption.\u00a0<\/p>\n
The strong negative effect from net exports should be less severe this year, either due to improved external demand or base effects combined with weaker domestic consumption.\u00a0<\/p>\n
There are also expectations for a better agricultural year which might boost the economic growth, the effects of this will only be seen in the third quarter.\u00a0<\/p>\n
Erste Group “keeps for now” its GDP growth forecast for 2026 at +3.1%\u00a0“pending more fiscal clarity” and noting risks to the downside for this figure as well, the financial group’s research note reads.<\/p>\n
The government’s CNP is more cautious, with a 2.4% growth forecast for 2026.<\/p>\n