ZEW-Erste Group Bank Economic Sentiment Indicator for Central and Eastern Europe (CEE) - Central and Eastern European Countries: Plunge of Economic Expectations

The ZEW-Erste Group Bank Economic Sentiment Indicator for Central and Eastern Europe including Turkey (CEE) decreases by 23.4 points to minus 2.5 points in June 2011.

The indicator displays a negative value for the first time since mid-2009. The economic expectations for the Eurozone on a six-month time horizon have worsened in June as well. The respective indicator has decreased by 18.4 points to a value of minus 14.8 points. A double-digit decrease of experts’ expectations is revealed by the respective indicators for all surveyed economies. Although the majority of experts assess the current situation in all economies of the CEE region as still rather normal, experts’ expectations for the next six  months could not remain unaffected by the difficulties in the Eurozone. 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 indicator which reflects the assessment of the current economic conditions in the CEE region has decreased by 16.5 points to 4.7 points in June. Nevertheless a large majority of experts (76.7 per cent) still assess the current situation as normal.

The evaluation of the current economic situation in the Eurozone has slightly worsened by 7.0 points to a value of minus 14.6 points.

Information concerning further indicators of the CEE region, the Eurozone, individually analysed CEE countries or Austria can be found in the table at the end of the press release. The answers of all survey participants are taken into account for the calculation of the indicators for the CEE region, the Eurozone and Turkey. The answers of the Turkish survey participants are not taken into account for the calculation of the indicators for the individual CEE countries and Austria as their high participation share in the survey could cause significant biases in the survey results.

Survey Procedure and Methodology

The Financial Market Survey CEE is a survey carried out among financial market experts by the Centre for European Economic Research in Mannheim (ZEW) and the Erste Group Bank AG, Vienna. The target of this survey is to develop indicators describing the economic conditions in Central and Eastern Europe (CEE) as well as in Austria. The CEE region observed in the survey consists of Bulgaria, Croatia, the Czech Republic, Hungary, Poland, Romania, Serbia, Slovakia, Slovenia and since October 2010 Turkey.

The financial experts are questioned on their evaluations of the current business situation, the medium-term prospects of the respective economies and their expectations as to the development of the inflation rate, the short- and long-term interest rates, the exchange rates and stock prices on a six month time horizon. The analysts’ assessments reflect the qualitative direction of the estimated changes. The monthly ‘Financial Market Report CEE’ contains the results for every Central and Eastern European country in detail.

For further information please contact

Zwetelina Iliewa, Phone +49 621/1235-346, E-mail iliewa@zew.de