Look for:

Our offer for

Research Detail

2020/12/03 / Erste Group Research

Halfway to recovery in 2021


We expect CEE economies to rebound by 3.6% in 2021. The second wave of the pandemic and potential delay in the functioning of the Recovery Fund will weigh on the speed of recovery which will be driven by consumption and exports. CEE economies will return to pre-crisis levels only in 2022, with the exception of Serbia (in 2021) and Croatia (in 2023).

The pace of recovery is somewhat slower due to the negative impact of the second wave of the pandemic on quarterly growth in 4Q20 and assumption that some restrictive measures may remain in place in 1Q21. Annual GDP growth will jump to high positive numbers in 2Q, reflecting the very low base caused by this year’s spring lockdown. In 2H21, annual growth is to normalize and slightly accelerate by the year-end.

There is plenty of uncertainty surrounding the further development of the pandemic, which may affect growth on both sides. Earlier vaccination, successful treatment of patients with COVID19, or more efficient and accessible testing would definitely improve the situation and boost confidence in a faster and more durable recovery. On the other hand, any delays in vaccination or further waves of the pandemic followed by partial lockdowns would make the recovery very fragmented. Due to delays in the approval of the EU Budget, we are rather conservative regarding the availability of funds from the Next Generation EU grant schemes in 2021 and expect the significant part to arrive only in 2022-23.

CEE currencies have been on a rollercoaster ride so far in the fourth quarter. November brought some relief on FX markets. The US election results helped investor sentiment, and encouraging vaccine news also boosted risk appetite. The Czech koruna gained the most, as interest rate expectations went up in November. The zloty gained somewhat less, as the rate outlook was more stable in Poland. The Hungarian forint did not manage to firm too much. Rate expectations notably declined, which did not support the forint. In addition, the ongoing debate around the proposed EU rule of law regulation also did not help.

PDF Download Download PDF (489kB)

General information

AuthorErste Group Research
Date2020/12/03
Languageen
Product nameCEE Country Macro Outlook
Topic in focusFX, Macro/ Fixed income
Economy in focusCEE
Currency in focus-
Sector in focus-
Download





Accept

We use cookies and web analysis software to give you the best possible experience on our website. By continuing to browse this website, you consent for these tools to be used. For more details and how to opt out of these, please read our Data protection policy.

INFORMATION FOR PRIVATE CLIENTS / CONSUMERS

Any information, material and services regarding financial instruments and securities provided by Erste Group Bank AG or any of its affiliates (collectively “Erste Group“) on this and any linked website hereafter (jointly the “Websites”) shall be exclusively to investors who are not subject to any legal sale or purchase restrictions (the “Interested Party“).

The publication and distribution of information as well as offering and selling of products and services described on the Websites is prohibited by law in some jurisdictions. For this reason, persons in countries in which the publication as well as the offering and selling of products and services described on the Websites are not permitted by law, must not enter the Websites and/or acquire the products displayed on the Websites.

Neither Erste Group nor any third party shall offer access to the Websites or offer the products to especially, but not limited to citizen/residents of the United States and “U.S. person” (as defined in Regulation S under the US Securities Act 1933 as amended). For this reason, the distribution or redistribution of the information, materials and products into United States or into any other jurisdiction where it is not permitted under the applicable law, as well as to the citizens/residents of these countries shall be prohibited. The securities displayed on the Websites have not been and will not be registered under the US Securities Act of 1933 and trading in the securities has not been approved for purposes of the US Commodities Exchange Act of 1936. For this reason the securities may, inter alia, not be offered, sold or delivered within the United States or, for the account and benefit of U.S. persons.

The Interested Party is solely responsible to examine, whether he may enter the Websites under the law applicable to it. Erste Group shall not be responsible for the distribution of content of any of the Websites to individuals or entities which provide false information about their right to enter the Websites. For this reason Erste Group shall not be liable for any legal claims or damages which may result from the unauthorized entering or reading of the Websites.

By agreeing to this hereto, the Interested Party confirms that
(i) It has read, understood and accepted this Information and the Disclaimer;
(ii) It informed itself about any possible legal restriction and warrants that it is not restricted or prohibited to enter the Websites according to any law applicable; and
(iii) It does not make available the contents of the Websites to any person who is not qualified by law to enter the Websites.