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Eastern Europe is drafting behind Germany's 3.7% economic expansion - its fastest growth since 1991.
“Hungary, Slovakia and the Czech Republic all expanded at a much faster pace than we had expected, while the Romanian economy shrank by less than we thought likely after last quarter’s fiscal squeeze,” said economist Neil Shearing. “The key driver was probably a rebound in industrial exports on the back of continued strong growth in Germany.”
“The key issue is whether the German export machine can withstand the renewed slowdown in the global economy that appears likely over the next year or so,” Shearing said. “We’re cautiously pessimistic.”
BLOOMBERG also reports:
Eastern Europe's nations are struggling to attract foreign capital even as some Asian and Latin American countries struggle to control the flood of hot money from investors seeking higher yields.
“The countries that need the money the most are the ones with the biggest difficulty,” said economist Nigel Rendell. “They’d like more money from overseas, but I’m not sure they are going to get a great deal more because it’s just too risky.”
