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CEE: Overtaking the West this year?

According to analysts at Erste Bank the subprime crisis in the US and the slowing global growth will have a restraining effect on the economic growth of the Central and Eastern European (CEE) countries this year possibly having a negative effect on stock markets later.

The report published in Vienna adds that the crisis will influence the economies of the region less than those of Western Europe making the growth rate stay well over the western level. Erste Bank predicts an average GDP growth of 5% for the Czech Republic, Croatia, Poland, Hungary, Romania and Slovakia, while the rate of growth may be unevenly distributed among them. In spite of the moderate effect of the American mortgage crisis the growth in the CEE states may come to a halt if expectations for recession strengthen in the US. Especially Austria is likely to suffer from the American recession. (Gazdasági Rádió)