Countries of Central and Eastern Europe (CEE) have been through profound change in the quarter of a century since they became democracies and joined international organisations such as NATO, the Council of Europe and World Trade Organisation.
The region’s favourable growth dynamics have been achieved by political and economic stability that is backed up by EU membership. Young and dynamic populations are driving the region’s tech sector, which is seeing rapid growth. Currently there are around 30,000 start-ups, including 12 unicorns with a combined value of 30 billion euros.
Today, the region represents a combined GDP of 1.2 trillion euros and offers increased opportunities for public and private investors. In 2018, it accounted for almost 20% of economic growth in the European Union. According to the European Commission, Poland is expected to grow at 4.2%, which is three times higher than the EU average of 1.4%.
The convergence of the CEE region’s fundamentals and the development path of its capital markets was recognised by 2018’s upgrade of Poland from emerging to developed market by FTSE Russell, giving a clear signal of the region’s investment potential as a location that could outperform already established propositions, such as the BRICS.
Countries of the CEE region offer safety and growth with opportunities in both public and private markets. However, they face challenges related to the size of their economies and domestic capital markets. For example, the Polish equity market in the FTSE Russell Developed Market Index stands at below 0.15%. As the BRICS story was built both on its rapid growth rate and the sheer size of its markets, so it is crucial for CEE countries to act together as a regional bloc to reach critical mass and appear on the radar screen of large global investors.
What are the opportunities for investors from regional capital markets firms as well as global investment funds, venture capital and private equity? What does cross-border cooperation mean for new technology, 5G, infrastructure and renewable energy? How can a platform for maintaining and enhancing the region’s positive growth momentum be achieved? What is the role of the Three Seas Initiative in driving the region’s rapid expansion? How can the region successfully transform into a hub for future digital growth? How can regional business cooperation enhance democratic and economic development?