WOOD Flash – CEE macro: 2Q GDP signals strong Poland and Hungary, while Romania is stabilising
The preliminary estimates of 2Q18 real GDP have confirmed strong growth across countries – even in the Czech Republic, despite a large base effect that makes the yoy change look weaker than it is. Household consumption growth is stable at a high level and is likely to stay that way. However, exports are underperforming our model projections, while imports remain strong. This implies that net exports will be a growing headwind for GDP growth, and is part of the reason we expect a slowdown next year. The balance of payments dynamic is deteriorating, in our view, across countries: all countries show tightening funding for the current account, which should translate into weaker currencies eventually. The escalating problems in Russia and Turkey, as well as the upcoming debates on the judicial reforms in Hungary/Poland/Romania, could accentuate contagion risks.
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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