Central European Economic Outlook
Fri, Oct 23 2009, 08:59 GMT
by KBC Market Research Desk
Czech Republic
The fall in industrial output is starting to decelerate due to the one-off impact of the bonus for scrapping cars put in place in Germany. Given low domestic demand, the wave of price reductions is likely to persist and be yet another contributor to the favourable inflation outlook for next year. Hence, the central bank has several more arguments at hand for cutting its base rate.
Hungary
The country has become an exporter of capital as the C/A balance swung into surplus and foreign trade is going to post a huge surplus this (probably more than €2B). No wonder that the S&P rating agency upgraded the outlook for Hungary’s sovereign ratings.
Poland
The Polish economy will remain the economy within the EU, which will not slip into recession this global cycle. That is why we think that markets’ worries about the fiscal outlook are overblown.
Slovakia
The German scrap subsidy helped Slovak manufacturing to moderate its free fall and registered only a mild -4.2% Y/Y decrease in August. Harmonized inflation dipped to a new all time low at 0%. More and more institutions paint a rosier picture of the Slovak economy - EBRD expects +3.5% Y/Y growth in 2010.
