Financial News

HUNGARY: 2012 GDP forecast lowered to 0.9%

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.

Economic Expectations for the CEE Region Brighten Up

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.

Investment sustains OECD GDP growth in Q2 2011, but slowdown in private consumption continues

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.

IMF encourages the planned unification of financial supervision authorities in Lithuania

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 recovery not expected sooner than 2013

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.

Major financial groups back down from the peripheral EU countries' debt

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.

HUNGARIA: 2 Pillars' asstes for sale to reach the deficit target by the end of the year

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.