ZEW-Erste Group Bank Economic Sentiment Indicator for Central and Eastern Europe (CEE) - Current Situation Shows Major Improvement and is Expected to Remain Steady in the Mid-Term

In July 2015, economic expectations for the countries in Central and Eastern Europe, including Turkey (CEE region), have deteriorated. In the current survey, the ZEW-Erste Group Bank Economic Sentiment Indicator for the CEE region has decreased by 34.5 points to 15.5 points. This decrease is largely due to the fact that more than one fifth of survey respondents, who previously expressed optimistic expectations, have changed their forecasts to neutral (i.e. no change) this month. In contrast to economic expectations, experts’ assessments of the current economic situation have improved. This is indicated by an increase of 30.4 points to a level of 15.4 points of the respective indicator. One fifth of the survey respondents, who previously gave a negative assessment of the current situation in the region, have now given an either positive assessment (10.4 percent), or neutral assessment (9.6 percent) of the current situation.

The ZEW-Erste Group Bank Economic Sentiment Indicator for Central and Eastern Europe reflects the expectations of financial market experts for the CEE region for the coming six months. The indicator has been compiled on a monthly basis together with further financial market data by the Mannheim Centre for European Economic Research (ZEW) with the support of Erste Group Bank, Vienna, since 2007.

Information concerning further indicators for the CEE region, the Eurozone, the individual CEE countries covered by the analysis, and Austria can be found in the table at the bottom 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 incorporated into the calculation of the indicators for individual CEE countries and Austria, because 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 ZEW and 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 surveyed about their assessment 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, exchange rates and stock prices on a six-month time horizon. The analysts’ assessments reflect the qualitative direction of the estimated changes. The quarterly ‘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 (0)621/1235-346, E-mail iliewa@zew.de