despite Political Uncertainty Economic Analysis and Outlook for - - PowerPoint PPT Presentation

▶
despite political uncertainty
SMART_READER_LITE
LIVE PREVIEW

despite Political Uncertainty Economic Analysis and Outlook for - - PowerPoint PPT Presentation

Mar 21, 2024 798 likes •1.02k views

Wiener Institut fr The Vienna Institute for www.wiiw.ac.at Internationale International Economic Wirtschaftsvergleiche Studies Press conference, 29 June 2017 Economic Convergence despite Political Uncertainty Economic Analysis and

slide-1
SLIDE 1

1

Wiener Institut für Internationale Wirtschaftsvergleiche The Vienna Institute for International Economic Studies

www.wiiw.ac.at

Press conference, 29 June 2017

Economic Convergence despite Political Uncertainty

Economic Analysis and Outlook for Central, East and Southeast Europe and its Economic Relations with Austria Julia Grübler

slide-2
SLIDE 2

3

Source: wiiw forecast (June 2017). Overview International Environment Contributions to growth Relations with Austria Conclusion

EU members in Central and Eastern Europe

 EU-CEE 3.5 Bulgaria BG 3.5 Croatia HR 2.7 Czech Republic CZ 2.7 Estonia EE 2.3 Hungary HU 4.0 Latvia LV 2.9 Lithuania LT 3.0 Poland PL 3.3 Romania RO 4.8 Slovakia SK 3.3 Slovenia SI 3.5  Visegrád V-4 3.3

Growth projections for the CESEE region were for the most part revised upwards, to 2.4% in the aggregate for the year 2017

slide-3
SLIDE 3

5

Source: wiiw forecast (June 2017).

Growth projections for the CESEE region were for the most part revised upwards, to 2.4% in the aggregate for the year 2017

Overview International Environment Contributions to growth Relations with Austria Conclusion

Western Balkan

 WB 2.9 Albania AL 3.9 Bosnia and Herzegovina BA 3.2 Kosovo XK 3.7 Macedonia MK 2.6 Montenegro ME 2.5 Serbia RS 2.5  CIS & Ukraine 1.5 Kazakhstan KZ 2.5 Russia RU 1.3 Belarus BY 1.4 Ukraine UA 2.0  Turkey TR 2.8

slide-4
SLIDE 4

6

Note: Index of 100 shows the long-term average of EU-28. Source: Eurostat: Economic sentiment indicator.

Economic sentiment indicator, 2000-2017

Economic confidence indicators for the EU show highest scores since the onset of the global economic crisis

60 70 80 90 100 110 120 2000M01 2001M01 2002M01 2003M01 2004M01 2005M01 2006M01 2007M01 2008M01 2009M01 2010M01 2011M01 2012M01 2013M01 2014M01 2015M01 2016M01 2017M01 Austria EU-CEE European Union (28 countries) EU-28 May 2017

Overview International Environment Contributions to growth Relations with Austria Conclusion

slide-5
SLIDE 5

7

Source: wiiw Monthly Database incorporating national and Eurostat statistics.

Exports of goods (nominal, euro-based), 2012-2017 Change against previous year in %, 3-month moving average

The economic recovery in the euro area boosts exports of the CESEE region

  • 10
  • 5

5 10 15 20 25 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 CZ SK PL HU SI HR

  • 10
  • 5

5 10 15 20 25 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 BG RO EE LV LT

  • 40
  • 30
  • 20
  • 10

10 20 30 40 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 AL MK ME RS BA

  • 40
  • 30
  • 20
  • 10

10 20 30 40 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 TR KZ RU UA Overview International Environment Contributions to growth Relations with Austria Conclusion

slide-6
SLIDE 6

8

Source: eia – U.S. Energy Information Administration.

The assumption underlying the wiiw summer forecast report is a relatively stable oil price at around 50-55 US dollar.

The relatively low oil price is beneficial for private consumption in energy importing countries

Overview International Environment Contributions to growth Relations with Austria Conclusion

2015-01-13, 45.13 2016-01-20, 26.01 2017-06-14, 45.47 20 40 60 80 100 120 140 2012-06-05 2013-06-05 2014-06-05 2015-06-05 2016-06-05 2017-06-05

slide-7
SLIDE 7

9

Source: European Commission. (http://ec.europa.eu/budget/figures/interactive/index_de.cfm). wiiw calculation.

Operating budgetary balance in % GDP, 2011-2015

Higher contributions of EU-cofinanced investments to GDP growth are expected already for this year

  • 0.5
  • 0.5
  • 0.5
  • 0.4
  • 0.4
  • 0.3
  • 0.3
  • 0.3
  • 0.3
  • 0.3
  • 0.1

0.1 0.2 0.3 0.3 1.1 1.5 1.9 2.1 2.2 2.3 2.7 2.8 2.8 2.9 3.6 3.6 3.8 4.4

  • 2
  • 1

1 2 3 4 5 NL SE DE DK BE UK FR AT FI IT LU CY IE ES HR MT SI PT CZ SK RO EL EU-CEE EE PL BG LV LT HU

Overview International Environment Contributions to growth Relations with Austria Conclusion

slide-8
SLIDE 8

10

Note: Ranking by growth rates for the year 2017. Source: wiiw Annual Database incorporating national and Eurostat statistics; wiiw forecast (June 2017).

GDP growth in 2016 and 2017 in % and contribution of individual demand components in percentage points

Positive wage developments are backing household consumption in the EU-CEE

  • 5
  • 4
  • 3
  • 2
  • 1

1 2 3 4 5 6 EE HR CZ LV LT PL SK BG SI HU RO Gross fixed capital formation Household final consumption Net exports GDP (growth in %)

‚’16 | ‘17 Overview International Environment Contributions to growth Relations with Austria Conclusion

slide-9
SLIDE 9

11

GDP growth in 2016 and 2017 in % and contribution of individual demand components in percentage points

Negative effects of political turmoil materialise in Western Balkans and Ukraine; not (yet) in Turkey

  • 8
  • 6
  • 4
  • 2

2 4 6 8 10 RU BY UA ME RS KZ MK TR BA XK AL Gross fixed capital formation Household final consumption Net exports GDP (growth in %)

‚’16 | ‘17 Note: Ranking by growth rates for the year 2017. Source: wiiw Annual Database incorporating national and Eurostat statistics; wiiw forecast (June 2017). Overview International Environment Contributions to growth Relations with Austria Conclusion

slide-10
SLIDE 10

12

DE IT CH CZ NL CN HU SK FR US Other CESEE Rest of World

2005

DE IT CH CZ NL CN HU SK FR US Other CESEE Rest of World

2016 Source: COMEXT Eurostat.

Austrian trade in goods, 2005 and 2016, top 10, shares in % (ranking 2016)

A trade reorientation towards the East is set to continue; however, trade with Germany is still dominant

DE US IT CH SK FR CZ HU UK PL Other CESEE Rest of World

2005

DE US IT CH SK FR CZ HU UK PL Other CESEE Rest of World

2016

Export of goods Import of goods

Overview International Environment Contributions to growth Relations with Austria Conclusion

slide-11
SLIDE 11

13

Source: OeNB.

Austrian foreign direct investments, 2016 Top 10, shares in %

Austria continues to be one of the main investors in CESEE

DE NL CZ LU US CH RO UK HU SK Other CESEE Rest of World

FDI stocks

CZ DE CN AE CH RO NL SK HR RU Other CESEE Rest of World

FDI income

Overview International Environment Contributions to growth Relations with Austria Conclusion

slide-12
SLIDE 12

14

Source: FT fdimarkets.com.

Number of greenfield projects in CESEE with Austria as investor, 2015 and 2016 (ranking 2016)

Visegrád countries form the core of investment activity ...

1 2 3 4 5 6 7 8 PL RS SK CZ HU RO TR RU SI BG BA BY HR KZ UA 2015 2016

Overview International Environment Contributions to growth Relations with Austria Conclusion

slide-13
SLIDE 13

15

Sources: Foreign claims: BIZ (RBI for Kosovo in 2016).

Foreign claims of Austrian banks and non-performing loans, 2016 Germany and top 14 CESEE, shares in %

... and engagement of Austrian banks

CZ DE SK RO HR PL HU RU SI RS BG BA UA AL BY

5 10 15 20 25 30 35 5 10 15 20 25 Non-performing loans Austrian consolidated claims

Overview International Environment Contributions to growth Relations with Austria Conclusion

slide-14
SLIDE 14

17

Note: Serbia and Montenegro are taken together and include former Yugoslavia. The unemployment rate is defined as unemployed in % of the labour force. Sources: BALI, Austrian Federal Ministry of Labour, Social Affairs and Consumer Protection, wiiw calculations.

Share of unemployed people and unemployment rate in Austria by nationality, 2016 Germany and top 10 CESEE (ranking by population)

Unemployment rates for Austrians and CESEE nationals decreased, but vary by country of origin

0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 DE RS, ME TR BA RO HR HU PL SK RU BG Total Female 5 10 15 20 25 30 35 40 DE RS, ME TR BA RO HR HU PL SK RU BG Total Female

Registered unemployed Registered unemployment rate share in % in %

Overview International Environment Contributions to growth Relations with Austria Conclusion

slide-15
SLIDE 15

18

Source: OeNB.

Compensations of employees and migrant workers' remittances according to the balance of payments by partner countries, 2016, top 8, shares in %

Neighbourhood accounts for lion’s share of wages paid - in addition Western Balkans and Turkey important for remittances

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Remittances HU TR PL RS DE BA SK RO Other CESEE Rest of World 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Compensation

  • f employees

HU DE SK SI CZ PL RO IT Other CESEE Rest of World

Overview International Environment Contributions to growth Relations with Austria Conclusion

slide-16
SLIDE 16

19

Source: wiiw Database, Eurostat.

Gross monthly wages and wage increase in relation to Austria

CESEE on wage convergence track...

AL BY BA BG HR CZ EE HU KZ XK LV LT MK ME PL RO RU RS SK SI UA AT

1 2 3 4 5 6 7 8 20 40 60 80 100

Real wage growth rate p.a. in %, 2006-2016 Wage level in % of Austria at PPP, 2016

Overview International Environment Contributions to growth Relations with Austria Conclusion

slide-17
SLIDE 17

20

AL BY BA BG HR CZ EE HU KZ XK LV LT MK ME PL RO RU RS SK SI TR UA AT

  • 6
  • 3

3 6 9

  • 6
  • 3

3 6 9 Veränderung der monatlichen Bruttolöhne (EUR), in % Produktivitätswachstum, in %

Sources: wiiw Database, AMECO, Eurostat.

Wage and productivity growth in relation to Austria, 2007-2016

... but lagging behind in productivity growth

Productivity growth, in % Change in monthly gross wages (EUR), in %

Overview International Environment Contributions to growth Relations with Austria Conclusion

slide-18
SLIDE 18

21

Sources: World Values Survey (Survey 6: 2010-2014); SORA for Austria (2017).

Preference for ‘having a strong leader who does not have to bother with parliament and elections’, in % of the interviewed persons by age groups

Political developments together with Brexit represent the greatest sources of uncertainty in the medium term

0% 10% 20% 30% 40% 50% 60% 70% 80% RO RU KZ TR BY ES US NL SI DE PL < 29 30-49 50+ Austria

Overview International Environment Contributions to growth Relations with Austria Conclusion

slide-19
SLIDE 19

22

Forecast, % Revisions, pp 2017 2018 2019 2017 2018 2019 BG 3.5 3.5 3.6 0.6 0.4 0.3 HR 2.7 2.9 3.0

  • 0.1

0.0 0.0 CZ 2.7 2.7 2.4 0.3 0.1 0.1 EE 2.3 2.5 2.6 0.1 0.2 0.2 HU 4.0 3.9 3.3 0.7 0.5 0.2 LV 2.9 3.0 2.9 0.4 0.3 0.1 LT 3.0 3.2 3.3 0.3 0.4 0.2 PL 3.3 3.2 3.1 0.4 0.2 0.0 RO 4.8 4.3 4.3 0.8 0.3 0.3 SK 3.3 3.6 3.9 0.2 0.0 0.0 SI 3.5 3.2 3.1 0.6 0.3 0.1 AL 3.9 4.0 4.1 0.4 0.1 0.1 BA 3.2 3.4 3.4 0.4 0.4 0.3 XK 3.7 3.8 3.7

  • 0.2

0.0 0.0 MK 2.6 3.3 3.4

  • 0.5

0.0 0.4 ME 2.5 2.7 2.5

  • 0.6
  • 0.2
  • 0.8

RS 2.5 2.6 2.8

  • 0.3
  • 0.4
  • 0.5

Turkey TR 2.8 2.9 3.0 0.7 0.3

  • 0.1

BY 1.4 2.1 2.6 0.9 0.5 0.4 KZ 2.5 3.0 3.0 0.5 0.0 0.0 RU 1.3 1.6 1.8

  • 0.4
  • 0.1
  • 0.2

UA 2.0 3.0 3.0

  • 0.5

0.0 0.0 WB CIS +UA EU-CEE

Real GDP growth forecast and revisions

In the short term, positive effects are prevailing over potential negative effects of political turmoil

Note: Current forecast and revisions relative to the wiiw Spring Forecast 2017. Colour scale reflects variation from the minimum (red) to the maximum (green) values. Source: wiiw forecast (June 2017). Overview International Environment Contributions to growth Relations with Austria Conclusion

slide-20
SLIDE 20

23

Wiener Institut für Internationale Wirtschaftsvergleiche The Vienna Institute for International Economic Studies

www.wiiw.ac.at

Thank you for your attention!

Follow us: www.wiiw.ac.at