Vojtěch Benda: world economy will recover Czech economy most out of all CEE countries

Given its relatively high degree of openness and export orientation, Czech Republic should benefit more from the recovery of world economy than other CEE countries, said Mr. Vojtěch Benda, Senior Economist ING Commercial Banking at today's press conference.

„While we see exports improving further in coming quarters, the temporary brake on economic growth through 1H10 may be a slowdown of private consumption and ongoing contraction of fixed investment throughout 2010”, said Mr. Vojtěch Benda and added: „Recent data from labour market signal the growing trend in unemployment halted in March, while rising new job vacancies suggest a gradual improvement for the labour market is on the way, which should soon be reflected in improving consumer sentiment as well. Therefore, we expect private consumption should rebound to a positive growth already in 2H10 and hence it will be contributing to gradual acceleration of GDP growth. Overall we see GDP growth at 2.4% in 2010 and above 3% in 2011”.

According to Vojtěch Benda, the economic contraction uncovered a huge structural gap in the public finances, which will not due to only slight expected growth of economic activity allow budget deficits to decline below 5% of GDP for coming two years. On the other hand, still relatively low levels of public debt, as well as still easy access to internal funding sources, should provide enough time for deeper structural reforms of public finances.

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