9:42 13 September 2025
CEE Growth Model at a Crossroads: Innovation Key to Catching Up with the West
Central and Eastern European (CEE) economies have achieved remarkable convergence with Western Europe over the past two decades, but experts warn that the current growth model has reached its limits. According to a new report by SGH Warsaw School of Economics and the Economic Forum 2025, future progress will depend on higher investment in research and development (R&D), institutional reforms, and a shift towards greater innovation.
Between 2004 and 2024, the 11 CEE countries recorded the fastest GDP growth in the EU, averaging 3.2 percent annually – nearly three times the EU-15 average of 1.2 percent. This drove an unprecedented income convergence: after 21 years in the bloc, the region narrowed its development gap by over 31 percentage points, reaching 75.2 percent of EU-15 GDP per capita. Romania and Lithuania led the way, followed by Bulgaria and Poland.
Economists describe this trajectory as a “patchwork capitalism” model, blending elements of socialism, feudalism, and market economies. Yet challenges such as energy transition, demographics, and AI adoption demand new strategies.
“The region’s economic situation is strong, but overcoming institutional barriers and boosting innovation is crucial to sustain growth,” said SGH Rector Piotr Wachowiak.
(Newseria)
