Analysis: CEE economies growing; recovery remains fragile


Positive economic metrics across the region indicate overall improvements, although subdued demand means that recovery is tenuous, US-based independent researchers/analysts Moody’s Analytics reported in its latest economic outlook for Central and Eastern Europe...

“There were many positive developments as the Czech Republic and Poland grew faster than anticipated in the second quarter, while Hungary repaid its $25.5 billion IMF loan early despite worse-than-expected economic performance”, said Moody’s Analytics economist Tomas Holinka. “However, fear that the Fed (Federal Reserve) will end quantitative easing has driven up sovereign bond yields and recovery in the region remains fragile.”

Moody’s Analytics notes that Hungary’s economy performed worse than expected and only grew a seasonally adjusted 0.1% over the previous quarter, when it posted 0.7% growth. The rise in real interest rates, despite a record low nominal rate, drags on the country’s fragile recovery. While the inflation rate slowed to 1.6% year-on-year in July, nominal interest rates on new business loans remained above 7%, tightening credit and squeezing fixed investment.

Moody’s Analytics expects the Polish and Hungarian economies to grow by 1.1% and 0.7% this year, respectively, while output in the Czech Republic will drop by 0.7% before returning to growth (1.6%) in 2014.

The Czech economy emerged from a long recession in the second quarter of 2013, as real gross domestic product jumped 0.7% following a 1.1% drop during the first three months. Meanwhile, Poland’s real GDP rose 0.4% in the second quarter, after growing 0.2% in the Q1. Both countries saw exports grow in the Q2, but domestic demand remains subdued because of elevated unemployment and tight credit.


Business Sentiment Up, Consumer Confidence Down in September Analysis

Business Sentiment Up, Consumer Confidence Down in September

Horthy Statue to be Unveiled in Parliament Parliament

Horthy Statue to be Unveiled in Parliament

UPS Appoints Regional Director Appointments

UPS Appoints Regional Director

Completion of Metro Line M3 Renovation Delayed City

Completion of Metro Line M3 Renovation Delayed


Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.