Nov 19 (Reuters) - The OECD expects Russia and central and eastern Europe's economies to advance in 2015 after a mixed picture next year as the region tries to overcome the impact of a slump in the euro zone, it said on Tuesday.
The organisation of the world's most developed countries said that next year Russia had little leeway to cut interest rates while Hungary should also stay on hold, but Poland should begin removing its monetary policy stimulus.
It urged Slovenia to move quickly to repair bank balance sheets and shore up the sector as the most pressing task to stabilise its economy.
RUSSIA
The OECD again cut its 2013 growth outlook for Russia, to 1.5 percent from the 2.3 percent it forecast in May.
It also reduced its 2014 outlook to 2.3 percent from 3.6 percent, but saw growth picking up to 2.9 percent in 2015. Growth should gradually strengthen thanks to infrastructure spending and investment in the mining sector as the euro area recovers.
Low unemployment should keep consumption growth solid, it said. Interest rate cuts would not be appropriate until core inflation declines more rapidly, while currency depreciation adds to inflation pressures, it said, adding: "Little space is available for monetary policy rate cuts in 2013 and 2014."
POLAND
The OECD raised Poland's growth forecasts for this year and next to 1.4 and 2.7 percent from May's outlook for 0.9 and 2.2 percent, citing rising exports and domestic demand.
It saw 2015 growth of 3.3 percent. Slack in the economy will hold inflation pressure down for some time before price increases rise to above 2 percent in 2015.
"With diminishing spare capacity, the central bank will need to begin removing monetary stimulus by increasing its policy rate in 2014," it said.
As growth pick ups and monetary policy remains fairly accommodative, the government had scope in 2015 to reach medium-term fiscal consolidation objectives faster than planned.
HUNGARY
The OECD raised its outlook for Hungarian growth to 1.2 percent this year and 2.0 percent next from a previous 0.5 and 1.3 percent. It then sees growth slipping back to 1.7 percent in 2015. It suggested Budapest could foster lending by allowing better bank profitability and cleaning up bank balance sheets.
"Since further monetary easing entails risks, notably of currency depreciation, and domestic demand is already picking up, the policy rate should stay on hold for now.
As economic slack diminishes and inflation begins to rise, the monetary stance should start to gradually normalise," it said.
CZECH REPUBLIC
The OECD cut its Czech GDP forecast to -1.5 percent and 1.1 percent for 2013 and 2014, from a previous -1.0 and 1.3 percent. Growth in 2015 was seen at 2.3 percent.
Growth was expected to gather pace in 2014 as fiscal consolidation pauses and external demand accelerates, although unemployment was likely to decrease only marginally.
"Positive growth surprises should be used to halt and eventually reverse the rising debt-to-GDP ratio. Monetary policy should remain accommodative as inflation is low and expectations appear well anchored," the OECD said.
SLOVAKIA
Slovakia's growth forecasts were little changed at 0.8 percent this year and 1.9 percent in 2014, from 0.8 and 2.0 percent respectively, before the economy expands 2.9 percent in 2015. Growth will strengthen as improved export markets boost investment and exports, especially in the automotive industry, the OECD said.
But joblessness will weigh on private consumption growth, and austerity to cut the budget deficit will damp demand.
"Downside risks are related to the uncertainty concerning the euro area crisis and the fragility of the recovery of Slovakia's main export industries," it said.
SLOVENIA
The euro zone country, grappling with big losses in its largely state-owned banking sector, should see its economy shrink by 2.3 percent this year and 0.9 percent next year before swinging back to 0.6 percent growth in 2015.
In May the OECD had seen GDP down 2.3 percent this year and up 0.1 percent in 2014. "Repairing bank balance sheets and ensuring recapitalisation of banks are the most important policy issues for stabilising the economy," it said.
reuters.com
The organisation of the world's most developed countries said that next year Russia had little leeway to cut interest rates while Hungary should also stay on hold, but Poland should begin removing its monetary policy stimulus.
It urged Slovenia to move quickly to repair bank balance sheets and shore up the sector as the most pressing task to stabilise its economy.
RUSSIA
The OECD again cut its 2013 growth outlook for Russia, to 1.5 percent from the 2.3 percent it forecast in May.
It also reduced its 2014 outlook to 2.3 percent from 3.6 percent, but saw growth picking up to 2.9 percent in 2015. Growth should gradually strengthen thanks to infrastructure spending and investment in the mining sector as the euro area recovers.
Low unemployment should keep consumption growth solid, it said. Interest rate cuts would not be appropriate until core inflation declines more rapidly, while currency depreciation adds to inflation pressures, it said, adding: "Little space is available for monetary policy rate cuts in 2013 and 2014."
POLAND
The OECD raised Poland's growth forecasts for this year and next to 1.4 and 2.7 percent from May's outlook for 0.9 and 2.2 percent, citing rising exports and domestic demand.
It saw 2015 growth of 3.3 percent. Slack in the economy will hold inflation pressure down for some time before price increases rise to above 2 percent in 2015.
"With diminishing spare capacity, the central bank will need to begin removing monetary stimulus by increasing its policy rate in 2014," it said.
As growth pick ups and monetary policy remains fairly accommodative, the government had scope in 2015 to reach medium-term fiscal consolidation objectives faster than planned.
HUNGARY
The OECD raised its outlook for Hungarian growth to 1.2 percent this year and 2.0 percent next from a previous 0.5 and 1.3 percent. It then sees growth slipping back to 1.7 percent in 2015. It suggested Budapest could foster lending by allowing better bank profitability and cleaning up bank balance sheets.
"Since further monetary easing entails risks, notably of currency depreciation, and domestic demand is already picking up, the policy rate should stay on hold for now.
As economic slack diminishes and inflation begins to rise, the monetary stance should start to gradually normalise," it said.
CZECH REPUBLIC
The OECD cut its Czech GDP forecast to -1.5 percent and 1.1 percent for 2013 and 2014, from a previous -1.0 and 1.3 percent. Growth in 2015 was seen at 2.3 percent.
Growth was expected to gather pace in 2014 as fiscal consolidation pauses and external demand accelerates, although unemployment was likely to decrease only marginally.
"Positive growth surprises should be used to halt and eventually reverse the rising debt-to-GDP ratio. Monetary policy should remain accommodative as inflation is low and expectations appear well anchored," the OECD said.
SLOVAKIA
Slovakia's growth forecasts were little changed at 0.8 percent this year and 1.9 percent in 2014, from 0.8 and 2.0 percent respectively, before the economy expands 2.9 percent in 2015. Growth will strengthen as improved export markets boost investment and exports, especially in the automotive industry, the OECD said.
But joblessness will weigh on private consumption growth, and austerity to cut the budget deficit will damp demand.
"Downside risks are related to the uncertainty concerning the euro area crisis and the fragility of the recovery of Slovakia's main export industries," it said.
SLOVENIA
The euro zone country, grappling with big losses in its largely state-owned banking sector, should see its economy shrink by 2.3 percent this year and 0.9 percent next year before swinging back to 0.6 percent growth in 2015.
In May the OECD had seen GDP down 2.3 percent this year and up 0.1 percent in 2014. "Repairing bank balance sheets and ensuring recapitalisation of banks are the most important policy issues for stabilising the economy," it said.
reuters.com
No comments:
Post a Comment