Hungary's government decided on November 9th to lower its initial economic growth forecast for 2012, of 1.5%, to 0.9%. According to Hungarian financial press, the downward adjustment means that previously announced fiscal adjustment measures will need an additional HUF 250 billion package in order to meet the deficit target. This would total an adjustment of about HUF 1,600 billion.
The ZEW-Erste Group Bank Economic Sentiment Indicator for Central and Eastern Europe including Turkey (CEE) has increased by 13.0 points in October 2011 for the first time in the last five months. The indicator has climbed up to the minus 25.0 points mark. Economic Expectations for the Eurozone have also increased by 18.3 points to a level of minus 49.1 points. The economic sentiment indicator for the CEE region and further financial market data have been surveyed monthly by the Centre for European Economic Research (ZEW), Mannheim, with the support of Erste Group Bank, Vienna, since 2007.
"The euro has lost some of its in attractiveness and Poland is in no rush to enter the euro-zone", governor of the National Bank of Poland (NBP) Marek BELKA stated recently, on the occasion of the NBP's Conference.
Standard & Poor's Ratings Services said on October 20th that it lowered its long and short-term sovereign credit ratings on the Republic of Slovenia to 'AA-/A-1+' from 'AA/A-1+'. The transfer & convertibility (T&C) assessment for Slovenia remains unchanged at 'AAA'. The outlook is stable.
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Real GDP in the OECD area grew by 0.3% in the second quarter of 2011. Gross fixed investment was the main contributor, adding 0.2 percentage point to overall growth. The contribution from private consumption continued to slow in the second quarter of 2011. At 0.1 percentage point the contribution from private consumption fell to its lowest level since the second quarter of 2009. The negative contribution from net exports reduced overall GDP growth by 0.1 percentage point.
Lithuanian economy has staged an impressive recovery, based on a supportive global environment and determined policy adjustment, is the main finding of the Concluding Statement afetr the IMF Staff recent visit in Vilnius. After contracting sharply in 2008-09, economic activity grew by 1½ percent in 2010 and a robust 6¼ percent in the first half of 2011. The export-led recovery broadened to domestic demand and employment growth accelerated. The recovery reflected both the global upturn and strong policy action, including sizeable fiscal consolidation, the maintenance of confidence in the banking system, and significant wage adjustment that underpinned gains in competitiveness.
Greek the recession will be deeper than was anticipated in June and a recovery is now expected only from 2013 onwards, concludes the final document released after the fifth joint review mission carried out by he European Commission (EC), European Central Bank (ECB), and International Monetary Fund (IMF) in Greece. There is no evidence yet of improvement in investor sentiment and the related increase in investments, in part because the reform momentum has not gained the critical mass necessary to begin transforming the investment climate.
The increasing concern about the major European financial entities' exposure to fiscally troubled governments in the region already determined some of this big players to unveil their changing investment policies aiming to strongly reduce the "bad" governmental bonds. Thus, ING and Lloyd's announced this week their retreat from the risky peripheral EU markets' debt.
Hungary's general government deficit stood at HUF 1,544.6 billion (~ EUR 5.3 billion) at the end of August 2011, which corresponds to 130.4% of the full-year target, the Economy Ministry said in a detailed budget report on Thursday, quoted by portfolio.hu. The ministry emphasised that by the sale of HUF 529 billion (~EUR 1.8 billion) from private pension fund assets transferred to the state the full-year target is safely achievable.
The ZEW-Erste Group Bank Economic Sentiment Indicator for Central and Eastern Europe including Turkey (CEE) has declined by 11.6 points in September 2011 for the fourth consecutive month. According to the latest ZEW survey, the indicator now stands at the minus 38.0 mark.
- Economic growth in the EU is slowing down. After growing strongly in the first quarter of 2011, GDP expanded less in the second quarter. GDP growth is now expected to remain subdued in the second half of the year, coming close to standstill at year-end. The soft patch predicted in the spring forecast is now likely to deepen but will not result in a double dip. On account of the stronger-than-expected performance in the first quarter, annual growth is still projected at 1.6% in the euro area and 1.7% in the EU, reveals a document released on September 15th, in Brussels, by the Directorate-General for Economic and Financial Affairs of the European Commission.
Addressing the European Parliament, on September 14th, President BARROSO made remarks on the current economic situation and the euro and set out the Commissions' view for the way ahead. He recalled that "solid, feasible and concrete proposals have been made" which now need to be implemented, and pointed out that the "only right way to stop the negative cycle and to strengthen the euro is to deepen integration, namely within the Euro area, based on the Community method". He stressed that a new, unifying impulse - 'un nouveau moment federateur' is indispensable" and confirmed that "the Commission will soon present options for the introduction of Eurobonds."