The countries of Central and Eastern Europe have successfully avoided the middle-income trap and evolved into high-income economies. The next challenge is to converge with the income levels enjoyed by some of the core EU economies. But this could prove more difficult. The old growth model, based on exports and cheap labour, has reached its limits, and a new strategy is now required.

In this week’s THINK aloud, a condensed replay of our live webinar, we discuss the long-term challenges and opportunities in the region, and share our views on the outlook for growth, inflation and monetary policy over the coming year.