ZAGREB, 20 dec (Hina) - According to the latest EU Regular Economic Report (RER), an annual publication of the World Bank, the export of clean technology from Central and Eastern Europe could at least triple, strengthening the EU economy and its competitiveness.

Meanwhile, the clean technology sector offers significant growth potential in four countries, including Croatia, the World Bank reported on Thursday.

The RER presents economic developments and prospects in the European Union, with a special focus on countries most engaged with the World Bank Group in EU Central and Eastern European countries (EU-CEE).

The World Bank's report highlights that GDP growth in the EU is projected to reach 1.4% in 2025, although this will not be uniform across all member states.

Thanks to easing inflation and continued growth in nominal wages, real wages, after a period of decline, are showing signs of recovery. However, risks remain, such as geopolitical tensions, disruptions in trade, and uneven economic recovery, combined with rising living costs across the Union.

Headline inflation in the EU eased steadily in 2024, dropping to 2.8% by mid-year from 6.4% in 2023.

Real wages are rising, and consumer spending is improving. Yet risks persist, as historically high prices continue to strain European households. By June 2024, consumer prices in Bulgaria, Croatia, Poland, and Romania had risen more than 25 percent compared to June 2021, driven by a 36 percent surge in food prices and far outpacing wage growth. 

"High prices typically hit the most vulnerable in Europe the hardest, with some families spending more than half of their income on food, while low-skilled and manual workers struggle to cope with unequal conditions in the labour market. Targeted social policies are crucial for supporting those in greatest need and ensuring broader economic inclusion. Additionally, the green transition presents an opportunity to create new jobs and strengthen industries in a fair and inclusive manner," said Anna Akhalkatsi, Director of the World Bank for the EU.

Thanks to clean energy technologies, which are essential for achieving net-zero emissions by 2050, the EU could position itself as a key player in the rapidly expanding global market while also meeting the growing demand within Europe. The goal of the Zero-Emission Industry Act is for domestic production to meet 40% of the EU’s demand for clean technology by 2030, and 15% of the global market by 2040, the World Bank says.

The clean-tech market holds sizeable promise for Bulgaria, Croatia, Poland, and Romania. World Bank simulations suggest these countries could triple or even quadruple their clean-tech exports if they maintain or exceed current market shares. Poland already plays a critical role as an intermediary in value chains, while Bulgaria and Croatia are less integrated. Strategic industrial policies tailored to national strengths could help these countries capitalise on opportunities.

Croatian firms in clean tech value chains demonstrate limited integration within the domestic economy and rely heavily on foreign suppliers, with only 25 percent of their supplier network being domestic. Simulations conducted in the EU RER 10 Part 2 show that Croatia could increase its clean energy technology-related exports to other EU countries potentially several times over from 2022 level, under current EU policies.