At the beginning, CEE governments were among the fastest and strictest with lockdowns back in spring 2020. However, a softer policy response combined with less careful behavior by residents in autumn/winter and weak healthcare systems drove the numbers of reported cases and deaths per one million inhabitants up to the top of EU rankings. Regarding economics, EU-CEE11 recorded with -3.9% a smaller decline in GDP in 2020 than the EU average of -6.2%. FDI flows to the region dropped in the first half year of 2020 by 35% - still lower than the EU decline with 73%.

The post-pandemic country attractiveness model captures the recovery potential of the EU-CEE11 economies in the next 1-3 years. The three Baltic states – Latvia, Estonia and Lithuania – came out on top of the ranking thanks to high institutional quality, advanced digitalization and solid public finances. They are in the best position to benefit from trends triggered and reinforced by the pandemic and valued by investors. Overall, the EU-CEE11 countries show an average attractiveness ranging from 4.87 (Hungary) to 6.51 (Latvia) on a 10-point-scale.

In a qualitative content analysis, the annual reports 2020 of 49 regional players were examined with respect to financial performance changes and main crisis fighting activities. Total revenues of the sample firms dropped in the 2019-20 period by 15%. Hospitality and oil & gas were hit the hardest among the nine industries, while software, pharma and grocery retailers could even grow in 2020. The net income fell by half, while the number of employees increased slightly by 3%. A close look at the measures taken to cope with the crisis reveals, that health & safety related actions, retaining customers and keeping their operations and supply chains running had highest importance in 2020. Latter is obvious as pharma, grocery retailers, banking, telecom, and oil & gas have been seen as critical infrastructure providers.

In 2021, gaining new customers and increasing sales are on top of the management agenda in all companies. Further digitalization was mentioned frequently as a priority for future investments. Qualifying and training rank high among financial service providers and remote-working has firmly become part of HR policies of the majority of companies.

To conclude, the CEE region remains attractive for Western and regional multinationals when they succeed in participating in the new developments and growth areas induced or reinforced by the pandemic.

Download the report