Friday, 2 October 2026
Central and Eastern Europe is entering a new phase in the development of its investment markets. Foreign capital remains important, but the region is accumulating considerably more domestic wealth than in previous investment cycles. At the same time, geopolitical change is directing money towards defence, energy security, digital infrastructure and more resilient supply chains. The challenge is increasingly how to connect CEE’s expanding savings base with businesses, infrastructure, property and technology projects that require long-term capital.
Commercial real estate illustrates the changing balance between domestic and international investors. Investment across the CEE-6 markets reached EUR 5.8 billion during the first half of 2026, according to Colliers, with Poland attracting more than EUR 3 billion and Czechia exceeding EUR 1.4 billion. Regional investors remain significant participants, although Western European capital has been returning. This creates a more diverse investment market than one dependent primarily on capital arriving from outside the region.
Geopolitics is simultaneously altering investment priorities. PwC’s 2026 survey found that 39% of CEE chief executives considered geopolitical conflict a significant exposure, compared with 37% concerned about macroeconomic volatility. But some of the same pressures are generating investment requirements. Europe’s focus on defence capacity, energy independence, electricity networks, data infrastructure and secure supply chains is creating opportunities for countries capable of providing industrial capacity, skilled labour and suitable infrastructure.
The potentially transformative source of capital, however, lies with CEE households. Poland alone had approximately PLN 2.26 trillion of readily available household financial assets at the end of 2024. According to the National Bank of Poland, cash and deposits with banks and credit unions represented 77.2% of this amount. The concentration demonstrates both the conservative structure of household wealth and the potential available to capital markets if even part of those savings gradually moves into longer-term investments. The IMF has similarly identified Poland’s heavy reliance on deposits and relatively limited household exposure to listed equities and investment funds.
This is not exclusively a Polish issue. Across Europe, households continue to hold a substantial share of their financial wealth in deposits. The European Central Bank has estimated that as much as EUR 8 trillion could potentially shift towards longer-term market investments if European household allocations moved closer to the structure seen in the United States. This is a scenario rather than a forecast, but it demonstrates the scale of capital potentially available. The EU’s Savings and Investments Union is consequently seeking to make it easier for households to direct savings towards pensions and capital-market products that can ultimately finance European companies and investment.
ETFs and digital investment platforms could help accelerate that transition by reducing costs and making diversified portfolios accessible to a much broader population. Europe’s ETF market had grown to approximately EUR 2.7 trillion by May 2026 after attracting record inflows of EUR 326 billion during 2025. Costs across conventional investment funds have also been falling. EFAMA estimates average charges for equity UCITS declined by 21% between 2020 and 2024, while European households purchased EUR 258 billion of investment funds during 2024. For CEE asset managers, easier digital distribution offers an opportunity to reach savers beyond traditional private-banking and institutional channels.
Private markets provide another route for converting regional savings into productive capital. Poland launched Innovate Poland in July with at least PLN 4 billion intended to support investment through private equity and venture capital funds, with approximately 250 growth companies expected to benefit. Initial backing comes from institutions including PFR, BGK, the European Investment Fund and PZU. Elsewhere in the region, the EBRD has committed up to EUR 40 million to CEECAT Fund III, which reached a EUR 135 million first close and is targeting EUR 200 million for investments principally across Central and South-Eastern Europe and Türkiye. Such structures demonstrate how institutional capital can establish investment platforms capable of attracting additional private money.
The principal obstacle is scale. CEE is commonly discussed as a single investment region, but asset managers operate across different currencies, tax systems, pension structures, regulations and distribution networks. Public markets also remain relatively shallow. The EBRD calculates that stock-market capitalisation across seven Central and South-Eastern European countries averages below 15% of GDP, compared with around 68% across the EU, ranging from approximately 1.5% in Slovakia to 30% in Croatia. Regional investment products, cross-border funds, ETFs and private-market vehicles could help overcome some of this fragmentation, but successful managers will still require substantial local expertise.
The next stage of CEE’s investment development may therefore depend less on attracting another generation of foreign capital and more on building the financial infrastructure needed to put the region’s own wealth to work. International institutions and Western investors will remain important, particularly for large real estate, infrastructure and corporate transactions. But deeper pension systems, investment funds, private markets and accessible digital products could progressively turn CEE households and institutions into a much larger source of capital themselves. The savings already exist; the longer-term opportunity is creating sufficient scale, liquidity and investor confidence to connect that money with the region’s businesses and assets.
Source: CIJ.World Research & Analysis Team
