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Czech Republic
The Czech republic offers a stable, prosperous economy fueled by its exports to EU. The following is a an economic snapshot on this Eastern European country.
• Real GDP: $175.3 billion
• Real GDP growth forecast: 4.7% in 2008, 5.4% in 2009
• Slowed by US credit crunch, will begin to expand again
The Czech Future:
• Domestic demand will drive economic expansion in 2008
• Led by new availability of credit cards, mortgages
• In 2009, GDP boost will come mostly from trade (exports)
Unemployment: 6.6% (2007)
Inflation: 2.0% (2007 CPI est.)
Current Account Balance: -$3.8 billion
Currency: The Czech government and the central bank have reached an agreement on measures designed to stem the appreciation of the currency
Median Age
• male: 38.2 years
• female: 41.6 years
Sex Ratio
• under 15 years: 1.06 male(s)/female
• 15-64 years: 1.01 male(s)/female
• 65 years and over: 0.65 male(s)/female
Per Capita Income: $24,400
One of Eastern Europe’s highest life expectancies
• Life expectancy at birth: 79 years
• Behind only Germany and Slovenia
Recent News
• The Czech cabinet endorsed the first draft of a healthcare reform bill in April 2008.
Economic Trends
• The Restructuring of Czech firms allows for more US FDI
• Rapid growth in use of cell phones
• Privatization of telecommunications was slow starting
• Financial Sector not exposed to int’l credit crunch
• Czech Komercni Bank not affected by parent SocGen scandal
• EU funds bolstering the Czech economy
Economic structure
• 58% occupations in services sector
• Sale of CZK150bn in state-owned firms
Tourism
• 5% growth in 2005 has slowed to 1%
Automotive
• 2008 opening of Hyundai plant
• Industry to double from 2005 to 2011
Poland
Poland, referred to as the New Europe in some circles, is surprising some with its strong growth and economic problems. Will it become an economic hub in Europe in the future?
Memberships: EU Membership and Structural Funds since 2004
GDP: $421.5 bn
GDP Growth Rate: 7%; Inflation: 2.0% (2007 CPI est.)
Per Capita Income: $11,057; 17% of population below poverty line
Unemployment: 12.8%
Current Account Balance: -$2.8 billion
Exports have more than doubled since 2002
Economic Forecast:
• GDP growth: 5.1% in 2008, 4.3% 2009-2012
• Goal to adopt Euro in 2012
• Labor market problems
• 54% participation rate in the labor market
• Wages growing faster than productivity
• Need to liberalize market regulations
Median Age
• male: 35.8 years
• female: 39.5 years
11 million Internet users in population of 38 million
Low divorce rate compared to the rest of Europe
• 67,578 divorces in 2005
• Country is Catholic, 90% of people define selves as “religious”
“Brain drain” worker migration to UK
• Trend will reverse over long-term
• Firms need to know how to attract best talent
Machinery and Transport equipment
• 30% of imports
• 38% of exports
Packaging
• 1.5% of GDP
• Metal and Paper Packaging expected 5-10% annual growth
Foreign Investment
• Driver of recent economic success
• Computers
• Consumer Electronics
• Automobile Component Production
Agriculture
• Inefficient small farms without investment
Oil, Coal, Refining (controlled by government)
Sources: culture.polishsite.us
Hungary
Not much is spoken about Hungary's Economy. We set out to provide an economic snapshot of this economy and the key figures on this economy.
Hungary's Economic Structure
• Transitioned from Planned to Market Economy
• Remarkable turnaround of budget deficit
• 4% of GDP in 2008 from near 10% in 2006
• Low budget, low growth
• GDP: $138.2 billion
• Real GDP growth rate: 1.3% (2007), 2.3% 2008, 3.4% 2009
• Unemployment: 7.1%
• Inflation: 5.5% (2007 CPI est.)
• Current Account Balance: -7.1% of GDP
• Labor force participation: 57%
• Private sector 80% of GDP, FDI $60 billion since 1989
Hungary's Demographics
• Median Age
• male: 36.8 years
• female: 41.8 years
• Sex Ratio
• under 15 years: 1.06 male(s)/female
• 15-64 years: 0.97 male(s)/female
• 65 years and over: 0.57 male(s)/female
• Income per Capita: $19,500
• 4.4 million Internet users in a population of 10 million
• Only recent emergence of middle class
Hungary By Sector:
• Industrial Growth
• Mining 28.2%
• Manufacturing 13.8%
• From 1989-2000, 1/3 FDI into East Eur. went to Hungary
• Investment concentrated around Budapest
• Special initiatives for doing business in eastern Hungary
• Agriculture
• Land 1/10 price of Western Europe
• Speculating issue as EU ascension imminent
• Financial Services
• Foreign companies do not need government approval
• May conduct cross-border financial services
• Hungary issues investment-grade sovereign debt
Lithuania
Lithuania boasts high economic growth but has a sizeable current account balance affecting its economic landscape.
Economic Structure
• Rapid growth following 1998 Russian financial crisis
• GDP: $28.57 billion
• Real GDP Growth: 8%
• Unemployment: 3.2%
• Rapid Real Wage Growth
• Inflation: 2.4% (2007 CPI est.)
• Current Account Balance: -9.2%
Demographic:
• Median Age
• Male: 36.4 years
• Female: 41.6 years
• Sex Ratio
• Under 15 years: 1.05 male(s)/female
• 15-64 years: 0.96 male(s)/female
• 65 years and over: 0.53 male(s)/female
• Income per Capita: $16,700
• 2008 population growth estimate is -.284%
• Literacy rate: 99.6% (for men and women)
Lithuania By Sector:
• Agriculture
• Changes from collectivization to private to capital-scaled farms
• Construction
• 15% annual growth
• Almost completely privatized
• Shift from Russian to domestic contracts
• Manufacturing
• Leather and Textiles are biggest manufacturing sectors
• Wood and Furniture growing the fastest
• Export to UK and Sweden (60% of exports to Sweden are for IKEA)
• Financial Services
• Consolidation: 9 commercial banks, 90% foreign capital
• Falling interest rates fuel strong growth
Latvia
Latvia, a member of the EU since 2004, is facing serious economic challenges. The economy may be overheating and the current account balance is an economic indicator many are watching.
Economic Structure
• Latvia faces economic problems
• Overheating? Government/Central Bank slow to respond
• Current Account Balance: -$5.84 billion, 22% of GDP
• High inflation: 6.5% (2007 CPI est.)
• Currency is pegged to the Euro, increasing inflation
• Privatization of Real Estate and Banks
• WTO in 1999, EU in 2004
• GDP: $27 billion
• Real GDP Growth: 10.7%
• Unemployment: 5.9%
• Riga (capital) produces 57% of GDP
Demographic:
• Median Age
• Male: 36.9 years
• Female: 43 years
• Sex Ratio
• under 15 years: 1.05 male(s)/female
• 15-64 years: 0.95 male(s)/female
• 65 years and over: 0.49 male(s)/female
• Income per Capita: $17,700
• Ethnically diverse
• Life expectancy at birth: 72 years
Latvia By Sector:
• Forestry and Woodworking
• Large natural supple of timber
• Dependence on Russia
• Hurt by Russian financial crises, major import/export partner
• Russia attempting to transport goods via its own ports
• Construction
• 14% increase in 2007, 7% of overall GDP
• Strong investment and booming housing market
• Population density linked with job opportunities
• Fewer schools, healthcare, public services in rural areas
• Best to concentrate focus on major cities
Slovenia
Slovenia is the richest nation in Eastern Europe. Lesser known by companies in examining Eastern European markets, we decided to analyze the current economics situation.
Slovenia's Economic Structure
• Richest nation in Eastern Europe
• Former trading arm of Yugoslavia
• Strong ties with western trade partners
• GDP: $45.9 billion
• Real GDP growth: 6.3%
• Inflation: 3.5% (2007 CPI estimate)
• Current Account Balance: -$1.5 bn
Slovenia's Demographics:
• Median Age
• male: 39.8 years
• female: 42.9 years
• Sex Ratio
• under 15 years: 1.06 male(s)/female
• 15-64 years: 1.02 male(s)/female
• 65 years and over: 0.64 male(s)/female
• GDP per Capita: $27,300
• Religiously diverse
• Literacy rate: 99.7%
Slovenia By Sector:
• Increase in light manufacturing and services
• Pharmaceuticals
• Electrical Engineering
• Automotive
• Revoz is top exporter
• Slovenia division of Renault
• Ideal geographic location
• Transportation services for increasingly integrates nations
• Heavy investment in infrastructure
• Tourism
• Recent increase in tourism receipts
• Financial Services
• Domestically grown, difficult for foreign firms to invest
Estonia
Estonia has long been a hot spot for Finnish businesses and vacationers. The Baltic country is receiving significant inflows from abroad as European companies view areas of potential in the economy.
Economic Structure
• 2004 Joined NATO and EU
• Stronger economic growth due to structural funds and foreign investment
• GDP: $21.2 billion
• Real GDP Growth: 7.3%, projected 2.2% 2008, 3% 2009
• Overheating?
• Demand putting upward pressure on prices, wages
• Losing competition to China
• Inflation: 3.9% (2007 CPI est.)
• Current Account Balance: (-$3.1 billion)
• Unemployment: 5.2%
• Major trade partner with Finland (16% imports, 22% exports)
Demographic:
• Conflict between Estonians and Russians
• Highlighted by relocating Russian statue
• Median Age
• Male: 36.2 years
• Female: 43.2 years
• Sex Ratio
• under 15 years: 1.06 male(s)/female
• 15-64 years: 0.91 male(s)/female
• 65 years and over: 0.5 male(s)/female
• total population: 0.84 male(s)/female
• Income per Capita: $21,800
Estonia By Sector:
• Freight Transport
• Port of Tallinn
• Dependent on Russian cargos
• Fluctuates with political environment
• Air freight
• 8-9% annual growth through 2011
• Road frieght
• 4.5% annual growth fueled by trade with Europe
• Electronics and Telecommunications
Serbia
Serbia boasts strong GDP growth but faces continued political instability and corruption.
Serbia's Economic Structure
• GDP: $41.44 billion
• Real GDP growth rate: 7% (2007 est.)
• Inflation: 11.2% (2007 CPI est.)
• Current Account Balance: 8.9%
• High unemployment rate: 18.8% (2007 est.)
• Increase in economic growth rate after ousting Milosevic in 2000
• Political instability due to unresolved Kosovo issue
• Serbia has a large amount of foreign debt and a high export deficit
• Country is making attempt to dramatically increase exports
• Major goal is to gain admission to EU
• EU is Serbia’s most important trading partner
Serbia's Demographics:
• Median age
• Male: 36.1 years
• Female: 39 years
• Sex Ratio
• Under 15 years: 1.07 male(s)/female
• 15 – 64 years: 0.97 male(s)/female
• 65 years and older: 0.68 male(s)/female
• Highest malnutrition rate in Eastern Europe as of 2003
• 9% of population undernourished, compared to 2.5% in Germany, Ukraine, Poland, United States, etc.
Serbia's Industry Sector:
• Exporter of manufactured goods, food, and live animals
• In last 10 years, EU has contributed money to increasing livestock inspections, food safety, and lab modernization
• EU also contributing to infrastructure development
• Serbia is looking to become a regional hub for air transportation
• Serbia will import environmental technology to fulfill its EU admission requirements
• Will see increase in unleaded gasoline, filters, etc.
• Telecom is Serbia’s fastest-growing industry
• Annual growth-rate of 18.3% in telecom sector
Croatia
Croatia is often noted for its premier tourist sites. Despite slowdowns in the global economy, Croatia is likely to grow substantially this year. We set out to study the extent of Croatia's growth.
Economic Structure
• GDP: $50.96 bn
• Moderate, steady GDP growth around 4-6%
• Per Capita Income: $12,863
• Unemployment: 11.8%
• Current Account Balance: -$3.836 bn, -7.1% of GDP
• Economic future: GDP growth expected around 10% for 2008-2009
• Trade deficit growing: $5.07 bn in 2007, a 5-year high
• Uneven regional development
• Economy heavily influenced by state
• Privatization often resisted by both politicians and the public
• Currently furthering agenda of EU mandated reforms, though at slow pace
• Especially slow in politically sensitive areas such as agriculture, fishing, ship-building, and steel
• EU entry expected in 2011, at earliest
Demographic:
• Median Age
• male: 38.9 years
• female: 42.6 years
• Sex Ratio
• under 15 years: 1.05 male(s)/female
• 15-64 years: 0.99 male(s)/female
• 65 years and over: 0.63 male(s)/female
• Largely Catholic population
Croatia's Industry Sectors:
• Tourism
• Tourism receipts cover about two-thirds of the merchandise trade deficit
• The tourism industry accounted for almost $10.8 bn last year
• Major trading partners are Italy, Germany, and Bosnia and Herzegovina
• Major imports are machinery, transport and electrical equipment; chemicals, fuels and lubricants; and foodstuffs
• Major exports are transport equipment, textiles, chemicals, foodstuffs, and fuels
Slovakia
Slovakia has been an EU member since 2004. While growth may be lower in the upcoming months and the current account s expected to widen, the economy is still likely to expect growth. We set out to examine the Slovakian economy as it currently stands.
Slovakia's Economic Structure
• Successful transition from planned to market economy
• Joined EU in May 2004
• Goal to adopt Euro on Jan 1, 2009
• GDP growth: 5.7%
• Fueled by exports and high domestic investment
• Manufacturing and construction
• Slovakia in the future
• 2008 GDP: 4.4%
• Government expenditures more significant than investment
• Inflation predicted to decrease from 2007 level (6.9%)
• Large Current Account deficit (-6.9% of GDP)
• Higher trade deficit expected for 2008
Slovakia's Demographics:
• 60% of Slovaks live in villages with fewer than 5,000 inhabitants
• To reach consumers, far reaching marketing efforts necessary
• Sex Ratio
• under 15 years: 1.05 male(s)/female
• 15-64 years: 0.99 male(s)/female
• 65 years and over: 0.6 male(s)/female
• Median Age
• male: 34.8 years
• female: 38.2 years
• GDP per Capita: $19,800
The Slovakian Economy, By Sector:
• Growing Tourism Sector
• Overnight stays above 8 million in 2007 for first time
• Italian and Austrian visitors largest groups
• More jobs in hotels, restaurants
• Manufacturing
• Advanced technology sectors growing
• Automotive, Transport Equipment
• Least advanced technology manufacturing sectors declining
• Leather, Textiles
• Banking Sector
• Largely in foreign control
• Major construction of highway infrastructure
Bulgaria
Bulgaria, receiving less press than its neighbor to the north Romania, boasts strong economic growth. Problems continue to plague the country, and time will tell whether EU membership will help to limit such corruption and inhibitions to rapid economic growth.
Economic Structure
• Strong Economic Growth since 1996
• Inflation (6.1% 2007 CPI est.) , Corruption still a problem
• GDP: $ 39.6 billion
• Real GDP Growth: 6.2% in 2007
• Peak of Economic Boom Cycle
• Projected 6% annual growth through 2012
• Unemployment: 6.9% (down from 9.7%)
• Nominal Wage Growth: 20.6%
• Current Account Balance: -12.2% of GDP
• Opportunity for Consumer Good Importers