Epsilon Capital Management’s First Quarter European (Emerging) Economic Round Up - Livejournal

http://noblenia.livejournal.com/32352.html

This is Epsilon Capital Management's 2 Part Series on the Emerging European Economies for the first quarter of 2012.

In the first part of our report we looked at the Russia, Turkey and Poland the 3 largest Emerging Economies within Europe, now we turn to Hungary and the Czech Republic to round off the remaining economies of interest.

Hungary: Managing to keep its head above water

The impact of the Euro-zone crisis on the Eastern European nations depended on the extent of their reliance on Germany and their domestic fiscal cuts, going by the fourth-quarter GDP figures.

Thus, even though Hungary is not doing well overall, its economy posted a 1.4% year-on-year growth in the fourth quarter of 2011. However, the European Commission forecasted recessionary conditions in Hungary this year as its major trade partner Germany is expanding only at a slower rate.

Meanwhile, the deputy governor of the Hungarian central bank Ferenc Karvalits said he does not foresee any cut in the base interest rate until there is an improvement in risk perceptions. In a WSJ interview, Karvalits said a monetary agreement with the European Union and the International Monetary Fund could go a long way to bring down Hungary's vulnerability by providing a safety net.