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ERSTEŚ Group Press release Outlook 2021 26 February 2021 Outlook 2021 : Erste Group expects economic upturn in 2021 GDP growth rates seen between + 3 % and + 6 % , with Hungary posting region's strongest upswing CEO Bernd Spalt : „ We will experience an economic rebound in 2021 " Insolvencies : only trailing effect , no insolvency wave Company outlook : lower risk costs , significantly higher profits The stock exchange - listed Erste Group is optimistic about the current financial year . This optimism is based on the forecast economic upturn of between + 3 % and + 6 % in the economies of Central and Eastern Europe ( CEE ) . Despite the trailing effect of insolvencies in Austria and the CEE region , the bank expects that the current year will see its risk costs come in lower and its profits rising once again . ,, I am confident about the year 2021. We should experience a clear upswing in our region's economies this year and with it , a change of sign , from minus to plus , " says Erste Group CEO Bernd Spalt . This optimism regarding an upswing is based , among other things , on the fact that vaccination coverage of the population is increasing in a moderate but steady manner . EXPANSION FOLLOWING RECESSION The Corona pandemic caused the CEE economies to enter into recession in 2020 , although that economic contraction has turned out to be less severe than had been originally assumed . While the impact on Serbia was comparatively mild with a GDP decline of -1.1 % in 2020 , the Croatian economy plunged by -8.5 % compared with 2019. In Austria , the GDP decline in the past year was also comparatively strong at -7.2 % . According to preliminary data , the GDP downturn in 2020 amounted to 5.6 % in the Czech Republic , -5.2 % in Slovakia , -5.1 % in Hungary and -3.9 % in Romania . Erste Group sees a turnaround in 2021 , with the strongest GDP growth expected in Hungary ( + 5.5 % ) and Serbia ( + 5.0 % ) . The economies of Croatia , Romania and Slovakia should all also grow by more than 4 % , with the Czech Republic very close behind with an expected rise of 3.9 % . The GDP dynamic that some CEE countries evidenced in the final quarter of 2020 gives reason for optimism : the Hungarian , Slovak and Romanian economies unexpectedly posted growth in Q4 2020 compared with the preceding quarter - despite the dampening effect of the lockdown measures in the respective countries . SIGNFICANTLY BETTER RESULT EXPECTED IN 2021 Given these economic forecasts , Erste Group expects to post a better financial result in 2021. " We will also see a clear change in the dynamic of our earnings development , " says Erste Group CEO Spalt . The banking group's net result fell by 46.7 % to 783 million euros in 2020 due to the formation of high risk provisions , but is expected to rise again in 2021 . Seite 1/2