The new members of the European Union (EU) maintained strong momentum in
2006, some of these countries having registered record-high growth rates for more than a
decade. Robust domestic demand was the main driving force, although exports,
especially of the automotive sector, contributed to growth four as well. Increased wages,
a rapid expansion of consumer credit, including mortgage lending, improved employment
conditions, a rise in purchasing power via appreciated currencies and continued foreign
direct investment (FDI) inflows as well as EU aid have all supported robust consumption
as well as investment. A strong recovery continued in Poland. Growth reached a recordhigh
in the Czech Republic and Slovakia, and both Estonia and Latvia expanded at a
double-digit growth rate. The economies of Bulgaria and Romania, which joined the
Union at the beginning of 2007, also maintained robust economic growth. In the outlook,
aggregate GDP of the region is expected to grow by 5.4 per cent in 2007, moderating
slightly from the 5.9 per cent of 2006 in part because of fiscal consolidation in Hungary.