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."
The ZEW-Erste Group Bank Economic Sentiment Indicator for Central and Eastern Europe including Turkey (CEE) has declined significantly by 21.4 points in August 2011. The indicator which displays the expectations of the surveyed financial market experts regarding the economic development in the CEE region on a six-month time horizon now stands at minus 26.4 points. The indicator reflecting the assessment for the economic development in the Eurozone has dropped by 16.7 points to a level of minus 41.8 points. Whereas for the CEE region the majority of experts (50 per cent) retain neutral economic expectations, for the Eurozone 55 per cent are rather pessimistic.
Standard & Poor's (S&P) has raised its evaluation of the Czech Republic for long-term foreign currency obligations two levels from A to AA-. At the same time the agency raised its rating of the Czech state's long-term obligations in the domestic currency, the crown, by one level from A+ to AA-.
Russian lender SBERBANK recently said that it looking at potential takeover targets in Central and Eastern Europe, including in Poland.
Standard & Poor's announced on August 5, 2011, that it "downgraded its long-term counterparty credit and financial strength ratings and related issue ratings on all AAA-rated U.S. insurance groups to AA+ with negative implications." Beyond the immediate "storm" raised by the downgrade, The Insurance Information Institute analyses the possible effect on the U.S. insurance industry.
A recent survey runned by Portfolio.hu among some of the most reputed Hungarian financial analysts showed less optimistic estimates with regard to the 2011 and 2012 growth of the Hungarian economy. The analysts have lowered their GDP forecasts for Hungary both for this year and 2012, as a result of the swiftly deteriorating external economic environment and the local growth that has not even started yet. The consensus estimate shows a 2.3% year-on-year output increase for the second quarter of 2011, but the projections for later periods have come considerably lower. The market expects Hungary's consumer price index at 3.3% in July, but the deceleration of the economy will rewrite CPI estimates sooner or later.
"The global economic crisis hit the households of transition countries in multiple ways. Subjective perceptions confirm the widespread impact, with two-thirds of respondents being affected. Households were affected primarily through the labour market by job losses and reduced wages and remittances", concludes a survey, recently released by EBRD and The World Bank. The Life in Transition survey II, conducted jointly by the two afore mentioned entities in late 2010, surveyed almost 39,000 households in 34 countries to assess public attitudes, well-being and the impacts of economic and political change. The Survey provides vivid evidence of precisely how lives have been affected by the global economic crisis and its aftermath.
Real GDP in the OECD area grew by 0.5% in the first quarter of 2011.
Although private consumption remained the main driver of growth in the
OECD as a whole, its contribution to growth fell in nearly all major
economies. At 0.2 percentage point, private consumption's contribution
to OECD growth fell to its lowest level since the second quarter of
2009. The fall in the contribution from private consumption was offset
by a large swing in the contribution from inventories.
Among the EU Member States for which data are available for the first
quarter of 2011, the highest annual increases in hourly labour costs
were registered in Bulgaria (+7.8 %) and Hungary (+5.6 %). Still, both
countries belong to 6 CEE countries group recording the lowest labour
cost in the European Union. Annual decreases were observed in Greece
(-6.8 %)and Ireland (-2.2 %), the Labour cost index
published by EUROSTAT on June, 20th states.
"Emerging Europe returned to growth in 2010, but performance varied widely across the region, reflecting the idiosyncratic legacies of previous boom-bust cycles. For 2011 and 2012, an economic expansion of 4¼ percent is projected with much less disparity in intraregional growth, as domestic demand takes over as the main driving force", states the Regional Economic Outlook: Europe - Strengthening the Recovery, released in May by the International Monetary Fund (IMF).