Inflation across Central and Eastern Europe (CEE) eases on food prices, improving the outlook for increasing consumer demand in a number of countries in the region. Despite concerns about the impact of the euro zone crisis, investors’ confidence in CEE remains relatively strong, with the notable exception of Turkey where concerns about the country’s growing current account deficit weigh on investor perceptions.
- Bulgaria: The economy is gradually recovering but inflation, low investment, and the euro zone crisis will continue to weigh on growth
- Croatia: Despite welcome news on its EU membership, Croatia continues to struggle with serious economic problems
- Czech Republic: The expected government spending cuts and slowdown in exports to Germany will negatively affect consumer demand
- Hungary: As inflation eases and Hungary’s economy picks up, we expect a gradual but steady recovery in domestic demand in H2 2011
- Kazakhstan: An increase in government spending meant to buy popular support for the government will boost consumer demand
- Lithuania: With inflation stabilizing and the economic recovery on track, consumer demand will support growth more actively in H2 2011
- Poland: Polish consumers are a key driver of growth and investor interest in the country’s strong domestic
- Romania: The economy is slowly recovering and the government is seeking more aggressive reform measures
- Russia: The question of who will run for Russia’s presidency continues to weigh on investor perceptions of the country
- Serbia: Plagued by high unemployment and rising inflation, Serbia is seeking investors to help boost its economy
- Slovakia: Expected increases in car production will boost Slovak exports and drive growth for the rest of 2011
- Turkey: After winning the parliamentary elections, the AK Party will need to address rising consumer spending and inflation aggressively
- Ukraine: The Ukrainian government is increasingly focusing on cooperation with the EU as a key economic and foreign policy goal
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