Strategic location of the region ► ideally situated for building trade links b/n Western Europe, Middle East and Asia. Infrastructure has significantly improved with major investments planned in mid-term
Most countries are members of EU, OECD and NATO ► major changes in economies and business environment. Some have already adopted the Euro. Legal, regulatory and business conditions have marked solid improvement; regulatory framework synchronized following EU accession.
Stable economies with low level debt levels ► govt. debt to GDP is 50% vs. 95.6% for the Eurozone; gross private debt is 95% (65% corporate/30% household) vs 203% (143% corporate/60% household) for the Eurozone
Emerging Europe boasts well-educated and relatively inexpensive workforce ► labor force with tertiary education on the rise. Wages growing, but still lowest labor costs
Favorable tax regimes ► significantly lower tax rates (e.g. 10% corporate income tax in Bulgaria)
Strong support from EU funds ► €500 bln = 39% of the new EU members’ 2019 GDP is available for the period from 2021 to 2027
Central & Eastern Europe is a diverse region offering appreciable scale:
Country Group Name | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
Advanced economies | 2.278 | 1.743 | -4.404 | 5.197 | 2.427 | 1.107 | 1.595 | 1.889 |
Euro area | 1.789 | 1.592 | -6.086 | 5.244 | 3.058 | 0.501 | 1.788 | 1.936 |
European Union | 2.213 | 2.009 | -5.593 | 5.356 | 3.228 | 0.662 | 2.068 | 2.176 |
Emerging market and developing economies | 4.621 | 3.605 | -1.892 | 6.617 | 3.728 | 3.734 | 4.262 | 4.327 |
Emerging and developing Asia | 6.41 | 5.21 | -0.618 | 7.18 | 4.387 | 4.871 | 5.209 | 5.272 |
Emerging and developing Europe | 3.429 | 2.515 | -1.721 | 6.8 | -0.02 | 0.628 | 2.527 | 2.344 |
Latin America and the Caribbean | 1.196 | 0.17 | -6.985 | 6.903 | 3.471 | 1.742 | 2.357 | 2.546 |
Middle East and Central Asia | 2.649 | 1.66 | -2.701 | 4.494 | 4.954 | 3.607 | 3.536 | 3.614 |
Sub-Saharan Africa | 3.334 | 3.177 | -1.649 | 4.699 | 3.58 | 3.71 | 4.084 | 4.17 |
* Source: International Monetary Fund, World Economic Outlook Database, October 2022
EE is growing over 5 times faster than developed Europe à +2.4% on ave. b/n 2011-2020 vs. +0.5% for the euro-areа
Trend to persist in the following years as EE benefits from nearshoring and post-war reconstruction initiatives
GDP per capita way below EU average = catch-up potential
Corporate tax rates
Labor cost per hour ( E ), 2017
Taxes much lower in CEE vs. developed world
States provide tax incentives & additional stimulus to attract foreign investors
While convergence has been driving income growth, wages are still far below European averages
Min wages range b/n €194 in Bulgaria and € 425 in Turkey, vs. €1,473 in Germany and €1,500 in UK
| MSCI EFM Europe+CIS ex RU, € 31.12.2022 | |
| 1Y | 20.54% |
| 3Y, annualized | 7.99% |
| 5Y, annualized | 1.70% |
| 10Y, annualized | -1.88% |
FORWARD P/E
P/B, MRQ
DIV YLD
P/E PER COUNTRY, TTM
Over 20 years we’ve built a solid reputation as a reliable partner – our relationships with clients and partners are based on mutual trust and alignment of interest. We work with various local and international institutions in helping clients tap into the potential of Emerging Europe. We establish deep and enduring relationships with our clients to fully understand their unique investment needs.
Since 2012 we represent one of the top global asset managers, Schroder Investment Management (Schroders) in the markets of Bulgaria and Romania.
Our UCITS funds are offered to investors in Switzerland and Korea via the representation services of Waystone Fund Services and HDC (Hyundai) Securities, respectively.