EME Macro/Strategy: Czech Republic – 2021E – orderly rebuilding post COVID-19
Household spending and fixed investment have been badly affected by the COVID-19 restrictions, which has also resulted in a lacklustre recovery, if compared to other CE economies. Consumer surveys continue to signal elevated unemployment fears and a steep deterioration in the appetite for major purchases ahead. Income tax cuts for this year may prove to be a good catalyst for restoring consumer spending, but a full GDP recovery does not appear likely before 2022E.We underscore that we have doubts that the global recovery will have long legs, as we see too much inflationary pressure building up over time, relative to the prospects for the labour market and the impaired monetary transmission mechanism in the Eurozone. We see a one-in-three chance of a recession in 2022E, rising to 40% odds of a recession in 2023E, if the current policy mix in Europe is not changed.
WOOD & Company is the leading investment bank in Emerging Europe. Founded in 1991 and head-quartered in Prague, our footprint spans the region and touches investors around the globe.
A pioneer in Emerging Europe, WOOD executed many of the first CEE equity trades and landmark investment banking transactions. Our electronic trading platform was the first in the region, and remains the best. We are continually expanding our relevance and reach in these ever-evolving markets.
Our equity market share reflects our stature: 7% in Warsaw, 20% in Bucharest, 16% in Hungary, 40% in Prague and 5% in Vienna. Our distribution is unparalleled, with the largest salesforce in the region, servicing a uniquely diverse investor base.
We couple local expertise with a truly international perspective. With offices on the ground in the region, and in key financial hubs such as London and Milano, we are never far from our clients and we remain at the forefront of what’s afoot in the CEE emerging and frontier landscape.
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