Economic Update - Expanding Foreign Trade Helps Eastern Europe
Despite the seemingly improving economic situation in Germany, a major trade partner of East European countries, economic trends in Slovenia, Hungary, Romania and Croatia have not changed much in recent months apart from some signs of a slightly deeper contraction in Slovenia and a bit of a stronger performance in Hungary. The formerly strong links between Germany and these countries' growth rates are gradually becoming weaker, pointing to a sort of "decoupling" between the core and peripheral European countries amid slowly changing foreign trade flows. German exporters are no longer benefiting from credit expansion in Eastern Europe and are increasing trade with faster-growing Asian economies, while growing trade with non-EU countries helped ease economic difficulties and/or supported growth in some East European countries (which have been able to expand trade with non-EU countries). Domestic demand remains subdued in most countries.