Tie public debt-to-GDP ratios for CEE countries have improved - - PowerPoint PPT Presentation

Tie public debt-to-GDP ratios for CEE countries have improved substantially

Debt reduction since peak

SOURCE: AMECO DATABASE | ERSTE GROUP RESEARCH % of GDP 30 60 80

GERMANY

• 16.8
• 13.5
• 10.3
• 9.0
• 6.9
• 6.2
• 6.1
• 5.1
• 4.9
• 4.1
• 4.0
• 2.0
• 0.2

64.1 61.6 34.6 73.6 73.6 78.4 78.0 50.6 125.7 35.0 50.9 98.3 131.8 97.0 CROATIA CZECH REP. PORTUGAL HUNGARY SLOVAKIA ITALY SERBIA POLAND SLOVENIA ROMANIA AUSTRIA SPAIN FRANCE 81.0 44.9 82.6 80.5 84.6 84.0 55.7 130.6 39.1 54.7 100.3 132.0 97.0 75.1 CURRENT DEBT

(% SHARE OF GDP)

PEAK YEAR DEBT

(% SHARE OF GDP)

CEE COUNTRIES DEBT REDUCTION

(PP DECLINE IN SHARE OF GDP) MAASTRICHT LIMIT FOR GOVERNMENT DEBT

5.5 %

AVERAGE REDUCTION IN DEBT IN THE EURO AREA

SOURCE: EC (ASSESSMENT OF CP/SP) | ERSTE GROUP RESEARCH

Risks to CEE region‘s medium-term debt sustainability appear relatively contained, with Romania an exception

30 60

MAASTRICHT LIMIT FOR PUBLIC DEBT AVERAGE FOR EUROZONE (2017)

90

BULGARIA SLOVENIA ROMANIA CROATIA SLOVAKIA FRANCE PORTUGAL CZECH REP. HUNGARY POLAND AUSTRIA GERMANY SPAIN ITALY

25.4 34.6 35 50.6 50.9 64.1 73.6 73.6 78 78.4 97 98.3 125.7 131.8

57.3 25.6 10.7 45.9 34 37.9 61 72.9 60.4 55.1 108.2 109.5 108.5 132

2028 (EC FORECAST) 2017 CEE COUNTRIES

Gross public debt (% of GDP)

All CEE countries have lowered their budget defjcits, but some have relied mainly on lower interest costs and the cyclical rebound

SOURCE: AMECO DATABASE | ERSTE GROUP RESEARCH

GREECE SPAIN GERMANY HUNGARY CROATIA POLAND ROMANIA SWEDEN PORTUGAL CZECH REP. EURO AREA ITALY SLOVAKIA SLOVENIA AUSTRIA Cyclical components Cyclically adjusted primary deficit balance Budget deficit balance Interest costs

• 3

3 6 9 12

Contributions to defjcit reduction (as % GDP, 2010-2017)