The new paradigm of economic growth is that it is a function of savings rate, return on investment and cost of intermediation. We can easily see the role and importance of the financial sector with regard to all of these three factors.
Global trade has faced headwinds in recent years as trade-restrictive measures have outpaced liberalising measures.16 CEE economies have been disproportionately affected by this for two reasons. First, trade in CEE economies is especially responsive to cyclical developments. Since these countries have consistently been more open to trade over the past two decades, their trade elasticity is higher than in the rest of the EU.