Central Europe countries may be in trouble again if high inflation will cause an increase of interest rates - says European Bank for Reconstruction and Development in the recently published the report:Regional Economic Prospects in EBRD Countries of Operations: January 2011 (Polish Council for the Monetary Policy has already increased interest rates in January 2011).
In January 2011 Polish GDP (like Slovak and Hungarian economies) increased 0.3 percent as in the same month of previous year. Among faster growing economies in the region were also Albanian, Estonian, Georgian, Macedonian and Moldovian.
Russian economy in Jan 2011 stopped. (zero GDP).
From some reasons the EBRD report seems to be very optimistic although economic realities on the ground are much worse. EBRD analysts are convinced that the US stimuli will be especially an impulse for growth of Central European economies.
And, according to the EBRD analysts, further strength also the Polish economy:
Given the perceived fragility of the recovery in the US and the persistent difficulties in Eurozone financial markets, global liquidity is expected to remain abundant, with loose monetary policy in advanced countries. This may result in stronger net capital inflows into the region which may strain monetary policy frameworks of the larger and more liquid financial markets in the region (Poland, Turkey and Russia).
In the meantime The Wall Street Journal describes Polish government debt situation (which according the other local economists maybe even very optimistic):
Poland’s public debt measured according to European Union rules was 57% of gross domestic product at the end of 2010, Mr. Kazmierczak says. That’s a more pessimistic view than that of the government which said public debt, in a domestic measure that excludes certain categories, was about 53% of GDP.
