The global economy in mid-2025 is characterized by heightened uncertainty, driven by renewed trade tensions following the re-election of US President Donald Trump, volatile inflation and shifting geopolitical alliances. Tariffs on key goods – notably steel, cars and pharmaceuticals – have disrupted global trade flows, with US import volumes from Germany, Korea and Mexico falling sharply. While markets remain relatively stable, the World Trade Organization forecasts global trade to contract slightly by 0.2% this year, with only a modest recovery expected in 2026.
Despite this backdrop, the eurozone has demonstrated relative stability. The ECB has stopped cutting interest rates for now, but this is likely to change by the end of 2025. In the Central and Eastern European countries (CEE-6), monetary policy is increasingly supportive of growth: Poland has started to cut interest rates, supporting consumption and investment, although Romania and Slovakia face fiscal constraints, the consultancy Colliers wrote in a report.
Germany: Slow recovery with strategic spending
Germany – the economic pillar of the Central and Eastern European region – remains in a low-growth phase, with GDP set to increase by just 0.2% in 2025. However, the federal government has launched a long-term investment program focused on infrastructure, defense and the energy transition, which aims to raise growth to 1.0% in 2026 and potentially even more thereafter. Encouraging signs – As the manufacturing PMI indices rise, positive forecasts for manufacturing developments – indicate that the German recovery is taking shape, which has a significant impact on regional supply chains.
CEE-6: Europe’s growth engine
The six major economies in Central and Eastern Europe – Bulgaria, the Czech Republic, Hungary, Poland, Romania and Slovakia – remain the growth leaders in Europe. Regional GDP is forecast to grow by 2.4% in 2025 and by 2.9% in 2026, well above the eurozone average. Poland and the Czech Republic lead the way with robust domestic demand and investor confidence, while Bulgaria’s upcoming adoption of the euro contributes to political credibility. Hungary and Romania face more complex challenges, including fiscal tightening and inflationary pressures, while Slovakia’s growth prospects are held back by trade exposure.
Real estate investment: regaining momentum in H1 2025
Despite macroeconomic risks, the real estate markets in Central and Eastern Europe (CEE-6) showed remarkable strength in H1 2025. Investment volumes rose to EUR 5.3 billion, representing a 52% year-on-year increase. The Czech Republic led the region with over EUR 2.1 billion in transactions (+153%), followed by Poland with EUR 1.7 billion. Slovakia, Hungary and Bulgaria also recorded significant growth from a lower base.
The industrial and logistics (I&L) sector once again took the top spot with investments of EUR 1.7 billion, more than doubling the previous year. The outsourcing of production to geographically and culturally closer countries (nearshoring) and the higher demand for sustainable supply chains are the main factors behind this recovery, especially in the Czech Republic and Hungary. Office investment grew by 9% year-on-year, driven by modernization, hybrid working formats and demand for ESG-compliant assets.
The residential sector highlighted the structural reallocation of capital, with investment volumes growing by almost 800% compared to 2019. Poland saw a 114% year-on-year increase, driven by demand for PRS and BTR formats. Investment in the hospitality sector quadrupled, particularly in the Czech Republic and Hungary, on the back of growing tourism and targeted promotional strategies.
Capital sources
Capital from Central and Eastern Europe (CEE-6) remained the leading force, accounting for 54% of all investments in the first half of 2025, up 44% from last year. Investment from outside the EU also increased: US capital increased almost ninefold to €800 million, targeting the I&L, offices and hotels sectors. Chinese investors returned in full force, with volumes in the first half of 2025 20 times higher than in all of 2024, focusing on Hungary and Romania.
Forecast: Cautious optimism with favorable structural factors
While global risks persist – from trade policy volatility to fiscal tightening – CEE-6 fundamentals remain solid. The region benefits from its strategic geographic location, investor-friendly policy framework and improving infrastructure. The recovery in Germany, a likely ECB rate cut and continued EU cohesion funding represent growth potential.
In real estate, 2025 has already proven that capital is ready to flow into resilient, adaptable and high-potential markets. The interaction between macroeconomic stability, structural changes in demand and increasing investor awareness will continue to drive CEE-6 to become a hot spot in the real estate market in Europe.
Detailed statistics on average property prices in Bulgaria by city and neighborhood can be found at imot.bg