Terrible news out of Poland on Thursday morning as Polish manufacturing showed signs of a steepening downturn, posting the worst results since the depths of the first wave of the economic crisis in 2009.
April’s purchasing managers index, compiled by Markit Economics for HSBC, hit 46.9, far below analysts’ expectations of 47.8 and the worst since July 2009. PMI figures of less than 50 denote a contraction of manufacturing, and Poland has been posting them for 13 successive months, the grimmest performance in a decade. Continue reading »
Optimistic hopes that the slowdown in central Europe would start to level out in the early months of this year are proving to be far off the mark.
New data shows an accelerating downturn in Poland and the Czech Republic, the region’s two largest economies. Continue reading »
Not much of a surprise that fourth quarter Czech GDP numbers were bad. Released on Monday, they showed an annual contraction of 1.7 per cent – but for CEE bulls there are some signs that the trend may be changing.
The first was that household consumption showed a few faint signs of life, expanding by an annual 0.9 per cent in the final quarter after falling for the first three quarters of the year. Continue reading »
That bumping sound you hear may be the echo of Poland’s economy hitting bottom with new data showing the the economy grew by just 1.1 per cent in the final quarter of the year.
But disappointing though that is for a country that has boasted of its ability to ride the post-2007 global crisis, it was slightly more than the consensus forecast of 0.9 per cent. And new purchasing managers index numbers from central Europe released on Friday also suggest the region is doing a bit better than before, thanks largely to a pick-up in Germany, the biggest export market. Continue reading »
What does Milos Zeman mean for business?
The Czech president-elect does not have much direct power over his country’s economic policy – except for nominating members of the Czech National bank responsible for setting interest rates (the first seat there comes free only in 2014) – but his victory in last weekend’s elections does have implications for business. Continue reading »
The New Year has brought more bad news for the moribund Czech economy – new figures released on Monday show industrial production declining in November by even more than analysts expected, dropping by an annual 3.9 per cent (the consensus forecast had been for a decline of only 1.2 per cent).
While that was bad news, when adjusted for working days, the figures were even worse, showing a fall in industrial production of 6.2 per cent compared to a 3.2 per cent decline in October. Continue reading »
By Nicholas Watson of bne
The Czech authorities have temporarily blocked the state power company CEZ from signing a contract to build two nuclear reactors while they consider an appeal from France’s Areva against its disqualification from the tender. Continue reading »
The Czechs have become regional specialists in drawn-out and inconclusive political crises, the latest iteration of which saw premier Petr Necas (left) on Wednesday push through a controversial tax increase that was also a vote of confidence in his coalition government. Continue reading »
The Czech central bank on Thursday cut its policy rate from 0.25 per cent to 0.05 per cent, in a move that took observers by surprise and weakened the currency by a notch.
With Japan and Switzerland on zero, and Singapore on 0.01 per cent, it’s not the world’s lowest rate. Nor even the lowest in the EU, with Bulgaria on 0.03 per cent. But at these levels, we are splitting hairs. As Czech central bank governor Miroslav Singer said, Prague is on “a technical zero”. Continue reading »
By Nicholas Watson of bne
The Czech coalition government managed to see off a confidence vote in parliament on Wednesday evening, but a perfect storm of sleaze, voter unpopularity, political infighting and a weak economy promises to make the remainder of its term in office a struggle.
The three-party, centre-right coalition held ranks long enough to defeat a parliamentary no-confidence motion, its fourth in less than two years, called by the opposition Social Democrats. The opposition required 101 votes in the 200-seat lower house to topple the government, but managed only 89. Continue reading »
If the world of central bank interest policy were a dance contest, the Czech National Bank would easily be out-limboing the European Central Bank as the Czechs on Thursday cut their benchmark interest rate by 25 basis points to a record low of 0.5 per cent.
That sticks with a long-running policy of keeping rates below those of the ECB, whose benchmark rate is 1 per cent – although a recent Reuters poll found that 48 out of 71 analysts tipped the ECB to cut rates next week, most of them forecast a 25 basis point cut to 0.75 per cent. Continue reading »
Facebook friends watching their investment shrivel after the company’s disappointing initial public offering can be glad of one thing – at least they didn’t jump on an IPO offered by the Prague Stock Exchange. Continue reading »
The centre-right Czech government has no intention of letting up on its fiscal tightening programme, a senior minister tells beyondbrics after several weeks of turmoil caused by the disintegration of one of the parties in the coalition and a vote of confidence set for later on Friday night.
The government of premier Petr Necas looks set to gain a narrow majority in the 200-member parliament after the smallest coalition member – Public Affairs – formed a breakaway grouping with enough votes to allow the two year old government to continue functioning. Continue reading »
The Czech government on Wednesday approved a set of austerity measures aimed at bringing the budget deficit below 3 per cent over the next three years, but which had been so controversial that they almost split the ruling centre-right coalition.
The measures were prompted by the Czech Republic’s slower-than-expected economic growth, which has forced the government of premier Petr Necas to tighten the budget screws. Continue reading »