In 2008, Eastern Europe was in the throes of a major financial crisis. Burdened with public and private debt, Hungary, Latvia and Romania had to be bailed out by the IMF; they faced severe austerity measures and high unemployment. Fast forward three years and Eastern Europe seems in much better shape, while the West faces the most serious financial challenge since the establishment of the European Union.
Now, one analyst says Eastern Europe has learnt its lessons and has re-emerged leaner and stronger, which is why investors should go back and invest in the region.
"The big thing is that they did their homework, they were pushed by the IMF, they were pushed by foreign investors, so they have deleveraged," Marcus Svedberg, Chief Economist at Eastern Europe-focused asset management firm East Capital told CNBC on Friday.
Svedberg believes fiscal consolidation, coupled with low debt levels and low inflation in some parts of Eastern Europe provide an attractive mix for investors. While growth in the West has stalled, Svedberg said some of the stronger countries in Eastern Europe were now growing close to their potential. Poland, for example, grew 4.3 percent in the second quarter over the previous year.
"I would say Poland is one of the better economies, not only in Eastern Europe, but Europe as a whole. It was the only EU economy not moving into recession back in 2008," he said.Page 1 of 2 | Next Page