...After a year dominated by US trade policy uncertainty, growth in eastern European sovereigns has demonstrated some resilience to heightened geopolitical risks in 2026, most notably the impact of the US-Iran war on energy prices, and therefore weaker growth in key trade partners. These headwinds have been mitigated by private consumption and investment supported by the last year of the EU's Recovery and Resilience Facility (RRF) programme. Fitch Ratings expects some recovery in growth in 2027, but significant acceleration for central and eastern Europe (CEE) is constrained by limited space for monetary easing, partly due inflationary pressures, while high and rising government debt levels limit additional fiscal easing. Growth in Armenia and Georgia has maintained a strong pace. Turkiye's growth has slowed, and high inflation and exposure to shocks will continue test the policy rebalancing process. Domestic political uncertainty, driven by increased polarisation amid national and local elections,...
