The negative 2020 outlook for sovereign creditworthiness in Central and Eastern Europe (CEE) is driven by a weakening external environment, moderating growth and a lack of structural reforms, Moody's Investors Service said in report today, APA-Economics reports.
External headwinds will slow GDP growth to 3.3% in 2020 from 3.8% in 2019. Given broadly stable fiscal deficits, this growth will be sufficient to sustain the decline in already relatively low debt ratios, although performances will vary by country.
"Resilient domestic demand and accommodative monetary and fiscal policy will support growth this year," said Steffen Dyck, a Moody's Vice President - Senior Credit Officer and the report's co-author. "However, the CEE's open economies are vulnerable to the deteriorating global environment and face persistent domestic pressure points."