In H1 2025, the global economy faces uncertainty due to renewed trade conflicts and inflation volatility.

  • Still, the eurozone and particularly Central and Eastern Europe show resilience. Germany’s growth is modest but supported by new long-term investment programs. The CEE-6 economies remain Europe’s growth leaders, with Poland, Czechia, and Bulgaria standing out. Real estate markets are booming, especially in industrial & logistics, residential, and hospitality. Investments are rising both from local capital and international players, notably the US and China. Growth prospects are supported by Germany’s recovery, potential ECB rate cuts, and continued EU cohesion funding.

Global Context

  • Rising uncertainty in the world economy due to Trump’s re-election, renewed trade conflicts, volatile inflation, and shifting alliances.
  • New U.S. tariffs on steel, cars, and pharmaceuticals disrupted global trade flows.
  • WTO forecast: global trade to decline by 0.2% in 2025, with only moderate recovery expected in 2026.

Eurozone and Germany

  • The eurozone shows relative stability; the ECB paused rate cuts but may resume them by late 2025.
  • Germany: weak GDP growth (+0.2% in 2025), but a government-led long-term investment program (infrastructure, defense, energy transition) is expected to lift growth to 1.0% in 2026.
  • Early recovery signals: rising PMI indices and improving industrial outlook.

Central and Eastern Europe (CEE-6: Bulgaria, Czechia, Hungary, Poland, Romania, Slovakia)

  • Regional GDP growth forecast: +2.4% in 2025 and +2.9% in 2026, well above the eurozone average.
  • Leaders: Poland and Czechia (strong domestic demand and investor confidence).
  • Bulgaria: euro adoption prospects strengthen political credibility.
  • Hungary and Romania: challenges from fiscal tightening and inflation.
  • Slovakia: growth slowdown due to trade exposure.

Real Estate Market in CEE

  • H1 2025 investment volume: €5.3 billion (+52% year-on-year).
  • Leaders: Czechia (€2.1 billion, +153%) and Poland (€1.7 billion).

Sectors:

  • Industrial & Logistics (I&L): €1.7 billion, doubled vs 2024 (nearshoring, sustainable supply chains).
  • Offices: +9% (modernization, ESG compliance, hybrid work).
  • Residential: +800% vs 2019 (PRS, BTR, Poland +114% y/y).
  • Hotels: 4x growth (Czechia, Hungary, tourism demand).

Capital Sources

  • Domestic capital from CEE-6: 54% of total investments (up from 44% in 2024).
  • U.S.: nearly 9x increase (€800 million, focused on I&L, offices, hotels).
  • China: strong comeback, investment volumes 20x higher than in 2024, mainly in Hungary and Romania.

Outlook

  • Risks remain: trade policy uncertainty, inflation pressures, fiscal tightening.
  • Strengths: strategic location, investor-friendly policy framework, improving infrastructure.
  • Growth drivers: Germany’s recovery, potential ECB rate cuts, and continued EU cohesion funding.