CEE region gets better evaluations from the latest ZEW aa‚¬a€œ Erste Group Bank Sentiment Indicator

The August economic sentiment indicator for the Central and Eastern European region points to an improvement of the economic situation as analysts surveyed about CEE, Austria and the Eurozone give better evaluations compared to the previous month. Romania is the country where the indicator points to the highest increase in August, after registering the highest decline among all other analyzed countries for the month of July.

The economic sentiment indicator, which is surveyed monthly by the Center for Economic Research ZEW with the support of the Erste Group Bank in Vienna, reflects the assessment of financial market experts of the economic development of the region. The indicator has risen by 9.1 points for the month of August, reaching the 20.5 points mark. The ZEW Indicator of Economic Sentiment is ascertained monthly. Up to 350 financial experts take part in the survey. The indicator reflects the difference between the share of analysts that are optimistic and the share of analysts that are pessimistic for the expected economic development in Germany in six months. The survey also asks for the expectations for the Euro-zone, Japan, Great Britain and the U.S.A..

For Romania, the respective indicator rises by 32.4 points to 26.1 points. The evaluation of the current economic situation also achieves a significant improvement compared to the previous month by 18.2 points. However, the respective indicator still takes up the last place among the analyzed CEE economies with a value of minus 53.2 points. The predictions concerning the development of the Romanian stock indices market within the next six months are also more positive. The indicator which reflects the expectations concerning the development of the stock indices BET experiences the strongest growth in this month, namely by 36.0 points to the 35.9 points mark.

The current economic situation in the CEE region, Austria and the Eurozone receives a significantly better evaluation by the surveyed analysts in August compared to the previous month. As a consequence of the previous two months in which the prices of several resources and agricultural products have been increasing the financial market experts predict higher inflationary risks for the CEE region and Austria within the next six months. The respective indicators rise in August by 18.3 points to 45.8 points for the CEE region and by 17.3 points to 45.2 points for Austria. However, the relevant indicator for the Eurozone remains nearly unchanged at 37.0 points.

The CEE region observed in the survey consists of Bulgaria, Croatia, the Czech Republic, Hungary, Poland, Romania, Serbia, Slovakia and Slovenia. 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. Among the analyzed economies are the CEE region, the Eurozone as well as the Czech Republic, Poland, Hungary, Slovakia, Croatia, Romania and Austria.