Erste sees Czech economy recovering to 2% growth in 2014 after 1.3% contraction in 2013.

By bne IntelliNews January 2, 2014

The Czech economy should recover to a growth of 2% in 2014 after an estimated contraction of 1.3% in 2013, Erste Group said in a new CEE outlook published on Jan 2. In July 2013, Erste forecast a 0.3% GDP drop for the Czech Republic in 2013 and a growth of 0.9% for 2014.

The end of fiscal consolidation, which was to be blamed for the record-long recession the country emerged from in Q2, will help the economy start to grow again this year, Erste said. The new Czech government expected to be appointed later this month will be led by centre-left Social Democrats (CSSD) that narrowly won the October general elections and will include also anti-corruption and pro-business movement ANO and the Christian Democrats. According to Erste, the inclusion of ANO in the next government will be the other potentially important event for the country this year. ANO, led by billionaire Andrej Babis, was the reason CSSD backed off on its plans to raise taxes for big companies and high earners and has for now postponed the introduction of a special tax on banks, telecommunication companies and utilities.

Overall for the CEE region, Erste expects GDP growth to accelerate to 2.2% this year from 0.9% in 2013 and further strengthen to 2.8%. Erste’s report includes seven CEE countries – Croatia, the Czech Republic, Hungary, Poland, Romania, Serbia and Slovakia. The region’s economic growth will be twice as high as the growth expected for the euro zone, Erse said noting that the growth composition will be more balanced and thus more sustainable with 2014 being the first year after the onset of the crisis with investments rising in every country. Erste expects fiscal deficits to continue shrinking in CEE-7 and all countries, except for Croatia and Serbia, being able to meet the EU’s fiscal deficit limit of 3% of economic output. 

Real GDP growth  2012 2013f 2014f 2015f
Croatia -2,0 -0,8 0,0 1,0
Czech Republic -0,9 -1,3 2,0 2,6
Hungary -1,7 0,8 1,8 1,9
Poland 1,9 1,4 2,9 3,4
Romania 0,7 2,5 2,3 2,9
Serbia -1,7 1,8 1,0 2,0
Slovakia 1,8 0,7 1,7 2,5
Turkey 2,2 3,8 4,2 5,0
CEE7 average 0,5 0,9 2,2 2,8
CEE7 + Turkey 1,1 1,9 3,0 3,6
Source: Erste Group Research    

Related Articles

Czech KMV acquires PepsiCo bottler in Bulgaria

The Czech Republic’s biggest producer of mineral and spring water Karlovarske mineralni vody a.s. (KMV) is buying Quadrant Beverages, the official bottler of PepsiCo in Bulgaria, the Czech company ... more

Penta plans to delist Czech-based betting firm Fortuna

Slovak financial group Penta announced on March 31 that it plans to tender for the remaining shares in Czech-based betting firm Fortuna, and then delist the company. Penta, which holds 68.25% in ... more

CEZ sells MOL stake

CEZ has “conditionally” sold its 7.5% stake in Hungarian oil and gas group MOL, the Czech state-controlled energy group announced on March 30. The report ... more

Register here to continue reading this article and 2 more for free or purchase 12 months full website access including the bne Magazine for just $119/year.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

If you have any questions please contact us at sales@intellinews.com

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at sales@intellinews.com

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.

Dismiss