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According to Krzysztof Bledowski, economist for MAPI and author of the report, Central Europe cannot entirely protect itself from the Eurozone turmoil. "The CEE3 (the Czech Republic, Hungary, and Poland) simply lie too close to, and are sufficiently integrated with, the Eurozone through links in trade, investments, and banking to fully escape contagion," he writes.
Recession in Western Europe will not automatically cause a downturn on the eastern flank of the European Union. The larger risk in the sovereign debt crisis is that the contagion effect on bank liquidity and solvency could turn into a systemic banking meltdown.
Economic performance in the CEE3 will top that of the Eurozone in 2012 and 2013. Compared to the 0.5 percent Eurozone average GDP growth rate predicted for 2012, the CEE3 region should expand at a clip four times faster. For 2013, MAPI's baseline forecast has the Central European countries still growing at least twice as fast as the Eurozone.
For more details, visit mapi.net.
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