ZEW-Erste Group Bank Economic Sentiment Indicator for Central and Eastern Europe (CEE) - Economic Expectations Improved

In April 2014 the economic expectations for Central and Eastern Europe including Turkey (CEE region) have improved by 24.0 points. The ZEW-Erste Group Bank Economic Sentiment Indicator for the CEE region now stands at a level of 32.1 points. Economic expectations for all individual countries have also increased. The indicators for the Czech Republic (up 19.4 points) and Romania (up 18.6 points) have improved most. The ZEW-Erste Group Bank Economic Sentiment Indicator for Central and Eastern Europe reflects the financial market experts’ expectations for the CEE region on a six-month time horizon. The indicator has been compiled on a monthly basis together with further financial market data by the Centre for European Economic Research (ZEW) in Mannheim with the support of Erste Group Bank, Vienna, since 2007.

In this month’s special question participants were asked to reveal the reasons behind their economic expectations for the CEE region. The most often cited reason for optimism is the improving macroeconomic situation in the Eurozone as well as increasing global demand. Experts’ pessimism is fed by political instability in the region, especially by the crisis in Ukraine.

The experts’ assessment of the current economic situation for the CEE region has also improved significantly in April 2014. The respective indicator has increased by 15.0 points to the minus 10.7 points-mark. The largest improvement among the individual countries is displayed by the respective indicator for Turkey. Experts’ assessment of the current situation in Turkey has risen by 38.0 points to a level of minus 13.0 points. This is the highest level of the indicator since December 2013. The positive assessment is likely to be caused by the recent local elections in Turkey which took place on March, 30^th. The victory of Prime Minister Erdogan’s party seems to have somewhat relieved the increased political uncertainty.

For further information please contact

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

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 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, 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.