THE IMPACT OF MACROECONOMIC DEVELOPMENTS ON EXPORTS OF THE CENTRAL AND EASTERN EUROPEAN COUNTRIES

Abstract

Because of the financial crisis of 2007-2009 and of the Covid pandemic, the international trade was significantly hit in terms of export flows. The whole macroeconomic context was negatively impacted during those last crises. In this paper we aimed to analyse the correlations between the trends of macroeconomic variables during the last decade and the exports of the Central and Eastern European countries. The selected macroeconomic variables are those that are significantly related to the foreign trade, namely GDP growth, inflation, public debt, public deficit, interest rate and labour productivity. These variables display a high correlation with the foreign trade expressed as exports and imports. But the correlations are not the same for all CEE countries. During crises periods, these correlations often change and each country of this CEE region reacts differently to specific external shocks. Trade was significantly and negatively impacted by the last financial crisis and by Covid pandemic crisis, while economic growth rates, inflation rates, labour productivity public finances and interest rates have different trends in the CEE region according to specific conditions of each country and the measures adopted by the national authorities in time of crises. Based on the correlations between the trends of the macroeconomic variables and the developments of exports in this area, we can design some important policy recommendations for the economic policy which needs to be implemented in those countries to overcome these difficulties generated by the increasing commercial deficits during the last decade.