Growth Outlook for Central Europe

This year Czech and Slovak economies will probably fall about 3.5 percent, according to the latest estimate from the European Bank for Reconstruction and Development (EBRD). In January the bank expected that the Czech economy would stagnate this year and the Slovak economy increase by 2.5 percent. Czech National Bank in a new forecast is expecting that the Czech economy will fall by 2.4 percent.

At the same time, the EBRD said that gross domestic product in emerging European economies will fall by 5.2 percent. The January estimate calculated an increase of 0.1 percent following last year's growth by 4.2 percent.

The EBRD added that the global credit crisis, which had an immediate impact on the financial sector in the region, is now seriously affecting the corporate sector and leading to a large decline in output and domestic consumption.

For next year, the economy of developing countries in Europe should return to growth and increase by 1.4 percent. The gradual recovery should be mainly in the second half. Yet, there are still risks that this estimate may still change, considering that the bank revised its estimate of 2009 growth in the region in January and that in November it had estimated GDP growth of three percent for the region.

Czech National Bank today estimates that next year the Czech economy should grow again, by 1.4 percent.

However, the Czech Ministry of Finance expects a decline of 2.3 percent. In 2010, with the gross domestic product increasing slightly by 0.8 percent. The International Monetary Fund expects the Czech economy will fall by 3.5 percent and the European Commission estimates a fall of 2.7 percent.

The Slovak Ministry of Finance assumes that the economy will grow. In June, they will publish a new forecast, which will be based on timely data. But Finance Minister Ján Počiatek has already admitted that the Slovak economy could slump this year, about two and a half percent. European Commission for this year projects for the Slovak economy a decline of 2.6 percent.

Estimated economic growth for the countries of Central Europe and the Baltic States according to the EBRD:

Comments

[Vienna:]

I work in slovakia, and I am always quite astonished by the atricles which state that "astonishlingly it is less than the EXPERTS have assumed", and they keep on writing it, and people keep on reading it. Well reading is not understanding. As to Slovakia, the Auto and mechanical industry is basically cumming to a halt.

These are the key industries, so I wonder how we make it with minus 4 per cent, if the industrial production goes down significantly (and surely it is more than the experts say, we will hear that astonishingly it was much more than minus 25%).

If I was allowed I could place the prodcution forcast here, considering that oders get placed approx. 3-6 month before delivery, which means by now we must know what is in the pipeline till end of the year, and I am telling you, it is close to NULL.

May 13 04:25 PM

[expat in China:]

Vienna,

Please find a way to post those numbers? prepaid phone card and text to me "[e-mail]"

May 13 06:40 PM