After collapsing across the board earlier in the year, consumer and business confidence indicators have rebounded sharply over the past six months. In some cases, they are approaching pre-crisis levels and are consistent with a return to positive economic growth. Meanwhile, investor confidence has risen too. However, there are still a number of reasons to think that the recovery in Emerging Europe will be relatively weak. First, to the extent that car-scrapping schemes in the eurozone just bring demand forward, industrial confidence and activity in Central Europe could yet suffer a further set-back next year. Second, fragile banking sectors are likely to keep credit conditions tight for some time to come. Third, tighter fiscal policy is on the horizon in every country. As a result, we expect the region as a whole to expand by just 1% in 2010.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to gain:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services