KBC Market Research Desk
KBC Bank
After deterioration in recent months, CE leading indicators tend to stabilise. In the Czech Republic and Hungary the negative momentum in the Flash leading indicators has improved since September. In Poland the Flash even posted a minor gain in November (still can be revised down with the new data).
On the other hand one must keep in mind that the Flash indices have been declining for a while (especially in Poland since early 2014) and the bottoming process can take some time. As a result the indices are at more than one year lows and still point to a weaker end of 2014 and beginning of 2015.
The main outcome of the November reading is about the stabilisation for now. If confirmed in the months ahead, there is no reason to play more negative scenarios including significant downward revisions to the Central European GDPs. We expect Poland to grow around 3% and the Czech Republic and Hungary around 2% in 2015.
Looking deeper into the structure of the leading indicators, mainly external environment weighed on the regional sentiment. In the Czech Republic and Hungary, declining German business sentiment Ifo has been the greatest drag on the leading indices. In Poland we believe that beside the slower growth prospects for the euro zone, also the weaker demand from Russia and Ukraine could have played the role.
This non-exhaustive information is based on short-term forecasts for expected developments on the financial markets. KBC Bank cannot guarantee that these forecasts will materialize and cannot be held liable in any way for direct or consequential loss arising from any use of this document or its content. The document is not intended as personalized investment advice and does not constitute a recommendation to buy, sell or hold investments described herein. Although information has been obtained from and is based upon sources KBC believes to be reliable, KBC does not guarantee the accuracy of this information, which may be incomplete or condensed. All opinions and estimates constitute a KBC judgment as of the data of the report and are subject to change without notice.
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