Eastern member states of the European Union witnessed their economy slowing down for the third quarter in a row as inflation and prices of commodities continue to rise without any checks.
Poland which has the biggest economy in the eastern part of the European Union grew at a meager rate of 3.5 percent during the quarter which ended in September 2022. During the previous quarter , the economy of Poland had grown by more than 5 percent.
The situation is not different in other Eastern European states Romania and Hungary both slowed to 4% from 5.1% and 6.5% respectively.
Double-digit Inflation rates and high-interest rates are making life difficult for ordinary citizens in the eastern European economies. European Central Bank is following an aggressive interest rate hike policy to control high inflation in the economies under European. This has triggered an economic crisis in nearly all European states with Germany and Spain being the most affected. Executive Commission of the European Union said a few days ago that several member states will go into recession by next year.
It is also important to note that countries such as Poland, Romania, the Czech Republic, and Hungary are heavily dependent upon European Union to keep the economy rolling.
The cost of living crisis in Poland, and a severe drought in Romania and Hungary are making things more complicated for the Eastern European economies. The governments in these regions have been witnessing protests and public discontent regarding the handling of the economic crisis by the administration.
Hungary, where the government has been fighting multiple crises and is capping prices of some food staples to contain the surge, is now facing the prospect of two consecutive quarterly declines in economic output.
The finance ministry of the Czech Republic has already admitted that the economy has entered into a recession as it shrank for three quarters in a row.
Russian special military operation in Ukraine and resultant sanctions on Russian businesses had triggered an energy crisis in Europe. European Union which was heavily dependent upon Russia for energy needs found itself in the middle of a showdown when Russia decided to implement counter-sanctions in the form of cutting vital energy resource supply to Europe.
An imbalance in the demand and supply of energy commodities causes energy price hikes in international markets which resulted in high inflation rates across major economies. European economies were the most to be hit with high inflation rates as economies witnessed historically high levels in the consumer price index.