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.
The major decrease of experts’ optimism for the CEE region is likely to be a result of the increasing concerns regarding the Eurozone’s economic prospects and reflects the increasing uncertainty on the financial markets. 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.
Inflation expectations for the CEE region have dropped by 36.9 points reaching minus 6.2 points – the lowest level since September 2009.
The indicator which reflects the assessments of the current economic conditions in the CEE region has decreased by 10.1 points to 2.8 points in August. The evaluation of the current economic situation in the Eurozone has worsened by 14.6 points to the minus 39.2 mark.
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.
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