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Czech markets  |  December 03, 2012 07:14:22

Simon Evans (ING): Czech Politics investors vein tear, within two years the economy will grow again



Czech is in the valley of the current economic cycle, a year or two the economy begins to grow. It may complicate what is happening in the euro area and home consumers who are too cautious, says chief economist at the London branch of ING Simon Quijano-Evans. That is why the Czech government should stimulate the economy from the treasury. The market would thus according to Evans had a problem.

In 2013, do you think the storm in the euro area, a bit more calm. What does this mean for Central and Eastern Europe? Which markets will benefit from it, and which will continue to be under pressure?

Simon Quijano-Evans (SQE): In the short term, during the next few years, at best it will be countries whose dependence on the euro area is not too high. Conversely, countries like Hungary are among the most vulnerable. Can not, rely on loans in local currencies, which are still too expensive, so they are still dependent on what is happening in the eurozone. Therefore, we expect the most marked growth in countries such as Russia or Turkey. These are the most closed economies that are within the region least dependent on borrowing in foreign currencies.

Neither Czech borrowing from abroad too faces. Thus belong to the group of promising?

SQE: Yes, it is, however, necessary to take into account that this is a very open economy, which is sensitive to what is happening in the eurozone. Czechs are also very conservative, as consumers are very cautious.It is on the one hand, certainly well, just because one of the Czech secure ports to which foreign investors are now betting on the other side but it is now necessary that people have to spend in order to encourage economic growth. That's still waiting.

What then of the Czech economy in 2013, waiting for?

SQE: If you look at it from the perspective of the business cycle, the Czech Republic is now in the imaginary valley. During the year or two years, the economy could start growing again. But it is a condition that will improve the situation in the eurozone and that Germany will continue to thrive, a third of the exports from the region is directed there. In our opinion, these conditions are likely to be met, which means that if we stop Czechian slashes GDP growth estimates, or at least mitigate these cuts. Any modifications outlook should therefore possibly be upwards.

Czech political scene is one big rough pond. There is no risk that foreign investors nervous, which in turn will pay the entire economy?

SQE: From the perspective of a foreign investor is an important stable fiscal and monetary policy. In these disciplines, the Czech Republic ranks among the best in the region. Therefore, the development of foreign investors in the Czech political scene too excite. This will be true so long as a stable fiscal and monetary policy. Despite the political composition of the last Czech government made a reasonable policy, which counts.

And what market opinion new president who will succeed often controversial Vaclav Klaus?

SQE: I do not think that foreign investors would not particularly exciting.Certainly, however, it will be interesting to see how the candidates (and consequently a new president) will speak about the European Union and its future. Presidential election again simply indicate how the Czech Republic itself in relation to the EU sees.

What do you think Simon Evans of the Czech pension reform and opportunities for CNB to support the economy, can be found on the web Investment

Read also:

View Czech financial experts for 2013: The world is not black and white, so it would not be such nor your portfolio
View Czech financial experts for 2013: The world is not black and white, so it would not be such nor your portfolio

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Simon Evans (ING): Česká politika investorům žíly netrhá, do dvou let ekonomika znovu poroste

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