Tuesday, December 9, 2008

Outlook for Czech economy is not so bright.

I have started this blog as a purely focused on emerging markets in Central and Eastern Europe. Later on I have been adding my analysis about global stock markets. Anyway whatever happens in US is influencing direction for CEE markets.

Czech economy growth in last Q3 by 4,7%. Still impressive. But the outlook doesn't look bright. Automotive industry accounts significant share of national product. Currently it is about 7,5%. Czech and Slovak Republics are the countries with the biggest number of produced cars per capita. Major brands produced in Czech Republic are Skoda from Volkswagen Group (VLKPY), Toyota (TM), PSA Peugeot Citroen (PEUGY) and Hyundai.

There are already some plans/proposals in pipeline prepared by Czech government. Support packages related only to automotive industry like VAT deduction to all kinds of vehicles. Now it is related only to business cars (eg pick-ups, vans..). Another broad proposal is general VAT decrease by one or more percent to support all industries.

Talking about prediction of GDP growth, new (the most pessimistic) analysis appeared which already see Czech economy contracting in 2009.


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