The return of Ukrainians home after the signing of a peace agreement with Russia could lead to new economic challenges for Eastern European countries, in particular due to the outflow of Ukrainian workers, which could cause a shortage in the labor market and increase inflation. This is reported by Reuters.
The media writes that the countries of Central and Eastern Europe, which have taken in more than 4,3 million Ukrainians fleeing the war in the past two years, may face serious economic difficulties after the signing of a peace agreement.
The problem is that much of the economic growth in countries like Poland, the Czech Republic, and Hungary has been fueled by labor from Ukraine. The loss of these workers could lead to labor shortages, which would directly impact labor markets and inflation.
According to Charlotte Rueh, Director of the European Bank for Reconstruction and Development for Central and South-Eastern Europe, the return of a significant portion of Ukrainian migrants home will worsen the demographic situation in these countries, which are already facing low unemployment.
“Demography is a risk, and it will worsen after the war in Ukraine ends, because some of these Ukrainians will return home,” Rue noted.
“According to estimates by Raiffeisen Bank International, economic growth in Central and Eastern Europe last year was 2,2%, which is faster than
than the projected 0,8% in the eurozone,” the publication says.
According to Eurostat, of the 4,3 million people who fled Ukraine to the EU by December 2023, 22% were in Poland and approximately 9% in the Czech Republic.
“Part of the economic success in many countries is due to Ukrainians who have moved there over the past two years,” says Christian Petter, head of Austria and Central and Eastern Europe at J. Safra Sarasin.
It is noted that the unemployment rate in Poland is at an all-time low, forcing employers to raise wages by 10% last year. And the Czech government predicts a labor shortage in the near future, which may also occur in other countries in the region.