Post by tufta on Aug 29, 2010 9:56:21 GMT 1
23rd August 2010
The region was hit hard by the crisis, but reforms could be the key to future survival
The economic downturn damaged Central European economies, with some were hit harder than others. But the region still managed to hold its own in important areas when compared to “old” EU countries, according to consultancy Deloitte.
“Central Europe paid a high price for the global crisis,” said Rafał Antaczak, deputy president of Deloitte Business Consulting’s Polish branch, presenting a report on Central Europe’s macro- and microeconomic indicators in 2009.
“This was reflected in the fall of real GDP by an average of six percent in 2009,” he continued. “Moreover, the structure of the GDP components had changed – the share of investment, export and import fell, while the share of private and government consumption remained unchanged.”
The drops in exports and, even more pronouncedly, in imports, led to a two-fold fall of the trade deficit.
Despite the region’s trials, many CEE countries adjusted to the global crisis just as well as the EU15 countries by some measures, according to Deloitte. By other standards, the region weathered the financial storm even better. For example, public debt levels worsened much more in the EU15 than in Central Europe – on average, it reached 80 percent and 30 percent in relation to GDP, respectively.
“But Poland itself looks worse, because our deficit level is getting closer to 55 percent of the GDP,” said Mr Antczak, adding that the future depends on the Polish government’s will to implement reforms.
And fiscal policy should be at the top of all governments’ policy lists, if the region is to get through the next stage of the crisis.
“How we will survive the next phase of the crisis depends on what steps Central Europe takes in fiscal policy,” said Mr Antczak. “We cannot judge the fiscal programs for now, because nothing has been set in stone yet. What different governments, including Poland’s, declare, is one thing – what they actually do is another.”
From Warsaw Business Journal by Martyna Olik
The region was hit hard by the crisis, but reforms could be the key to future survival
The economic downturn damaged Central European economies, with some were hit harder than others. But the region still managed to hold its own in important areas when compared to “old” EU countries, according to consultancy Deloitte.
“Central Europe paid a high price for the global crisis,” said Rafał Antaczak, deputy president of Deloitte Business Consulting’s Polish branch, presenting a report on Central Europe’s macro- and microeconomic indicators in 2009.
“This was reflected in the fall of real GDP by an average of six percent in 2009,” he continued. “Moreover, the structure of the GDP components had changed – the share of investment, export and import fell, while the share of private and government consumption remained unchanged.”
The drops in exports and, even more pronouncedly, in imports, led to a two-fold fall of the trade deficit.
Despite the region’s trials, many CEE countries adjusted to the global crisis just as well as the EU15 countries by some measures, according to Deloitte. By other standards, the region weathered the financial storm even better. For example, public debt levels worsened much more in the EU15 than in Central Europe – on average, it reached 80 percent and 30 percent in relation to GDP, respectively.
“But Poland itself looks worse, because our deficit level is getting closer to 55 percent of the GDP,” said Mr Antczak, adding that the future depends on the Polish government’s will to implement reforms.
And fiscal policy should be at the top of all governments’ policy lists, if the region is to get through the next stage of the crisis.
“How we will survive the next phase of the crisis depends on what steps Central Europe takes in fiscal policy,” said Mr Antczak. “We cannot judge the fiscal programs for now, because nothing has been set in stone yet. What different governments, including Poland’s, declare, is one thing – what they actually do is another.”
From Warsaw Business Journal by Martyna Olik