Economic Sentiments for Central and Eastern Europe: Pessimism Returns

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

Mannheim, (PresseBox) - The ZEW-Erste Group Bank Economic Sentiment Indicator for Central and Eastern Europe including Turkey (CEE) has decreased by 11.8 points in November 2011 to a level of minus 36.8 points. The decline almost fully reverses last month's increase (October: up 13.0 points). Economic Expectations for the Eurozone have slightly declined by 6.2 points to a level of minus 55.3 points. 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.

The decline of economic expectations for the CEE region is mainly due to an increase of the pessimism for Turkey and Poland. The respective indicators have dropped by 22.6 points and 22.3 points respectively. It is likely that experts' sentiments on the CEE region are affected as well by the fading of the economic prospects in the Eurozone.

The assessment of the current economic situation for the CEE region has remained almost unchanged in November 2011. The respective indicator declined by 0.4 points to a level of 5.3 points. The respective indicator for the Eurozone has slightly increased by 4.6 points to a level of minus 53.1 points.

Information concerning further indicators of the CEE region, the Eurozone, individually analysed CEE countries or Austria can be found in the table at the end of the press release. The answers of all survey participants are taken into account for the calculation of the indicators for the CEE region, the Eurozone and Turkey. The answers of the Turkish survey participants are not taken into account for the calculation of the indicators for the individual CEE countries and Austria as their high participation share in the survey could cause significant biases in the survey results.

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.

Zentrum für Europäische Wirtschaftsforschung GmbH (ZEW)

ZEW is one of Germany's leading economic research institutes and enjoys a strong reputation throughout Europe. ZEW has distinguished itself by analysing internationally comparative issues in the European context and creating data bases important for scientific research, e.g. Mannheim Innovation Panel (MIP), ZEW Start-Up Panel. ZEW's key objectives are conducting economic research, providing economic policy advising and transferring knowledge. ZEW was founded in 1990 and currently employs a staff of 180, of which two thirds are researchers.

Research at ZEW:

International Finance and Financial Management; Labour Markets, Human Resources and Social Policy; Industrial Economics and International Management; Corporate Taxation and Public Finance; Environmental and Resource Economics, Environmental Management; Information and Communication Technologies; Growth and Business Cycles.

www.zew.de / www.zew.eu

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