Fragile Eastern Europe reduces its imbalances

Emerging market economies have shown considerable volatility recently, and some commentators worry e...

Emerging market economies have shown considerable volatility recently, and some commentators worry events in Eastern Europe in particular demonstrate the region remains fragile compared with other parts of the world. Joining the European Union enabled very rapid rates of economic growth for the likes of Poland, Hungary and the Czech Republic and as overseas investors became more confident about their convergence with Western Europe, many of these countries began to run large current account deficits. Exports grew fast, but imports even faster, especially capital goods for business inves...