Core Views
* Strong regional headwinds in the form of the Ukraine crisis and softer external demand are chipping away at the momentum behind the Czech Republic's recovery, as reflected in the Q314 GDP growth deceleration to 2.3% y-o-y from 2.7% in H114. The external economic outlook, which we expect to remain in place in 2015, will prevent growth from accelerating in 2015, underpinning our forecast of 2.6% real GDP expansion in 2015, from an estimated 2.4% in 2014. For 2016, we expect to see a moderate acceleration to 3.0%, in line with improving external demand.
* The centre-left cabinet of Prime Minister Bohuslav Sobotka will continue on an expansionary fiscal trajectory in 2015-2016. Nevertheless, the government has ample fiscal space to finance higher expenditure, and we do not expect to see deterioration in market perceptions of its sovereign risk profile.
* We reiterate our view that the country will continue to post modest current account deficits for the foreseeable future. The country's status as a regional safe haven will ensure that stable financial inflows continue to cover the country's external financing needs.
Full Report Details at
- http://www.fastmr.com/prod/924065_czech_republic_business_forecast_report_q1_2015.aspx?afid=101
Major Forecast Changes
* Having previously expected a weaker target for the koruna, we now expect the Czech National Bank (CNB) to maintain its current monetary policy stance in 2015. The CNB has signalled it will tolerate below-target inflation in the coming quarters, underpinning our re-assessment.
Risks To Outlook
* A more pronounced slowdown in eurozone economic growth and in particular in Germany would have a negative effect on the Czech Republic's economic growth trajectory. Owing to the high degree of trade integration with Germany, the Czech Republic's economic recovery remains highly dependent on external demand remaining relatively receptive to Czech exports.
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The Czech Republic Business Forecast Report helps businesses with market assessment, strategic planning and decision making to promote growth and profitability in Czech Republic and is an essential tool for CEOs, Chairmen, Finance Directors/CFOs, Managing Directors, Marketing/Sales Directors with commercial interests in this emerging market.
An influential new analysis of Czech Republic's economic, political and financial prospects through end-2018, just published by award-winning forecasters, Business Monitor International (BMI).
Key Uses
* Forecast the pace and stability of Czech Republic's economic and industry growth through end-2018.
* Identify and evaluate adverse political and economic trends, to facilitate risk mitigation.
* Assess the critical shortcomings of the business environment that pose hidden barriers and costs to corporate profitability.
* Contextualise Czech Republic's country risks against regional peers using BMI's country comparative Risk Rankings system.
* Evaluate external threats to doing business in Czech Republic, including currency volatility, the commodity price boom and protectionist policies.
The Czech Republic Business Forecast Report by Business Monitor International (BMI) includes four major sections:Economic Outlook,Political Outlook,Business EnvironmentandKey Sector Outlook.
Economic Outlook:
How will the Czech Republic economic policy-making and performance impact on corporate profitability over 2014-2018?
BMI provides our fully independent 5-year forecasts for Czech Republic through end-2018 for more than 50 economic and key industry indicators. We evaluate growth, and also forecast the impact of economic management.
Economic Outlook Contents
The Czech Republic Business Forecast Report features BMI's forecasts with supporting analysis for 2014 through to end-2018, set against government views and BMI's evaluation of global and regional prospects.
Key Areas Covered:
Data:
* Full 10-year forecasts with data - for key macroeconomic variables including GDP (real growth and per capita), population, inflation, current account balance and the exchange rate.
* BMI's comprehensive Risk Rankings system - rates each country worldwide for economic and political risk, and rates the business environment, within a global and regional context.
Written Analysis:
* Economic Activity - real GDP growth, employment, inflation, consumption (retail sales and confidence).
* Balance of Payments - trade and investment, current and capital account.
* Monetary Policy - interest rate trends (bank lending and deposit rates) and inflation (producer price and consumer price).
* Exchange Rate Policy - currency controls, foreign investment flows, exchange rates and foreign exchange reserves.
* Fiscal Policy - macroeconomic strategy and policies, government finance and tax reforms.
* Foreign Direct Investment - approvals, inflows and climate.
* External Debt - debt profile (short and long-term plus public and private sector exposure).
* Global Assumptions - forecasts for each year to end-2018 covering: major commodities, growth in key regions, inflation, and interest and exchange rates, in the United States, Japan, China and the eurozone.
Key Benefits
* Rely upon BMI's 100% independent forecast scenarios for Czech Republic and underlying assumptions - we take no advertising and are privately-owned.
* Exploit the benefits of BMI's comprehensive and reliable macroeconomic database on Czech Republic, sourced and fully maintained by BMI from an extensive network of private sector, government and multilateral contacts.
* Gain key insights into the current and future direction of government economic policy, which could significantly affect your company's business prospects, from BMI's team of analysts and economists.
Political Outlook:
What are the political risks to doing business in Czech Republic over the next 5-years?
BMI's Czech Republic country Risk Rankings evaluate the short- and medium-term threats to political stability.
Political Outlook Contents
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