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2020/11/09 / Erste Group Research

CEE Special | Challenge no.8 Regional development

Regional development is the eight report from the series titled “CEE – 10 challenges for the new decade”. With more than 80% of global GDP generated in cities, urbanization can foster economic growth, if managed properly. The migration of people from rural to urban areas results in the accumulation of human capital that can be used in a more efficient way and allows for knowledge and innovation spillover effects. People living in cities are better educated (the share of people 30-34 years old with tertiary education is 50% in cities vs. 28.4% in rural areas), have better digital skills and use the internet to a greater extent.

However, urbanization is far less advanced in CEE compared to the European average. A relatively high share of the population in CEE is still living in rural areas, occupying jobs in the agriculture sector. The share of the CEE population living in rural areas is the biggest in Romania, Slovakia and Poland, and among the highest in the EU.

Although access to Cohesion Funds supported the increase of productivity in rural areas across CEE and improved living standards, there is still space for improvement. Over the 2006-16 period, in most CEE countries, the regional income gap between the richest 10% and poorest 10% of regions narrowed. However, regional disparities persist.

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General information

AuthorErste Group Research
Product nameCEE Economies Special Report
Topic in focusFX, Macro/ Fixed income
Economy in focusCEE, Croatia, Czech Republic, Hungary, Poland, Romania, Serbia, Slovakia, Slovenia
Currency in focusCroatian Kuna, Czech Koruna, Euro, Hungarian Forint, Polish Zloty, Romanian Leu, Serbian dinar
Sector in focus-


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