## Chart of the Week: Central and Eastern Europe Close the Gap

_IMF Blog, May 22, 2017_

## Source details

**Canonical URL:** [Chart of the Week: Central and Eastern Europe Close the Gap](https://www.imf.org/en/blogs/articles/2017/05/22/chart-of-the-week-central-and-eastern-europe-close-the-gap)

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## Bibliographic details
- Authors: The Editors
- Published: May 22, 2017

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### Regional growth and output gaps
- Most countries of Central, Eastern, and Southeastern Europe will see their economies humming away at a strong growth rate in 2017.
- The output gap is used as the measure of success: the difference between current production and production at full capacity.
- A recently published report on the Central, Eastern, and Southeastern European region shows how close these economies come to performing at full potential.

### Aggregate composition and countries operating below capacity
- Turkey accounts for 21 percent of GDP in the region.
- Turkey and Russia together account for 62 percent of GDP in the region.
- Turkey appears to operate somewhat below capacity because of insufficient investment.
- Russia appears to operate somewhat below capacity because of insufficient demand.

### Countries at or above full capacity
- Most of the Baltic countries, Central Eastern Europe, and Southeastern Europe are around full capacity, or have even surpassed it.
- Unemployment rates in these economies have declined to pre-crisis lows.

### Countries well below full capacity
- Belarus, Bosnia and Herzegovina, and Ukraine are still far from going full throttle.

### Labor market, wages, and inflation dynamics
- Surpassing full capacity usually brings with it rising wages as the available workforce dwindles.
- Inflation also tends to rise because consumers’ demand for products and services increases.
- Despite widespread closure of the output gap, growing wages, and a less idle workforce everywhere but in Turkey and the Commonwealth of Independent States, prices have not gone up significantly in the region.
- This muted inflation is partly attributed to still low imported inflation from the euro area.

*Chart of the Week: Central and Eastern Europe Close the Gap — The Editors, May 22, 2017*

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## Content in this bundle

- **Диаграмма недели. Центральная и Восточная Европа закрывают разрыв. Блог МВФ; 22 мая 2017 года**
  - [Диаграмма недели. Центральная и Восточная Европа закрывают разрыв. Блог МВФ; 22 мая 2017 года (Markdown version)](/external/russian/np/blog/2017/052217r.pdf.md){rel="alternate" type="text/markdown"}
  - [Диаграмма недели. Центральная и Восточная Европа закрывают разрыв. Блог МВФ; 22 мая 2017 года (PDF)](/external/russian/np/blog/2017/052217r.pdf){rel="external" type="application/pdf"}

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## References

- [output gap](http://www.imf.org/external/pubs/ft/fandd/2013/09/basics.htm)
- [report on the Central, Eastern, and Southeastern European region](http://www.imf.org/en/Publications/REO/EU/Issues/2017/05/10/a-broadening-recovery)
- [https://www.imf.org/wp-content/uploads/2017/05/IMF.CESEE-REI_chart.jpg](https://www.imf.org/wp-content/uploads/2017/05/IMF.CESEE-REI_chart.jpg)

_Source: https://www.imf.org/en/blogs/articles/2017/05/22/chart-of-the-week-central-and-eastern-europe-close-the-gap_