Labour shortages are driving economic growth in Central, East, and Southeast Europe. Rising consumption and incomes are expected to continue, with solid GDP growth of around 3% per year. Improvements in the labor market and increasing wages are the main drivers of growth in the region. Countries are also seeing a recovery in fixed investments due to new EU funds. Despite challenges, economic growth remains strong in most countries, with private consumption being the main driver. Rising wages and decreasing unemployment are leading to labor shortages, partly due to outward migration. Inflationary pressures are low due to gains in labor productivity and a profit squeeze.