Economic convergence of Central and Eastern European countries in the European Union

Abstract

Eight Central and Eastern European (CEE) countries joined the European Union in 2004, and three later joined, aiming to align with the EU's average economic development. The main objective of this study is to assess the economic development status of CEE countries compared with the EU average and forecast their convergence by 2027. The study uses time-series analysis, normality tests, and convergence indices to determine the level of convergence achieved by CEE countries and various extrapolation methods to assess the level of convergence expected shortly. The results are ambivalent; in 2022, Lithuania, the Czech Republic, and Slovenia exceeded the EU average, while Croatia and Bulgaria lagged significantly behind. This study supports the neoclassical transition path theory, noting that in 2004, even less developed countries achieved the most dynamic growth by 2022. Despite the strong GDP correlation between EU and CEE countries, the drivers of GDP growth remain different. According to forecasting methods, Estonia will be next to reach an economic development level above the EU average. According to the results of extrapolation methods, Estonia may be followed by Poland, Romania and Slovakia in catching up with the EU.

Keywords

• CEE countries
• European Union
• convergence
• economic growth
• extrapolation