Czech Republic Business Forecast Report Q1 2015 - New Market Research Report

Core Views

* Strong regional headwinds in the form of the Ukraine crisis and softer external demand are chipping away at the momentum behind the Czech Republic's recovery, as reflected in the Q314 GDP growth deceleration to 2.3% y-o-y from 2.7% in H114. The external economic outlook, which we expect to remain in place in 2015, will prevent growth from accelerating in 2015, underpinning our forecast of 2.6% real GDP expansion in 2015, from an estimated 2.4% in 2014. For 2016, we expect to see a moderate acceleration to 3.0%, in line with improving external demand.
* The centre-left cabinet of Prime Minister Bohuslav Sobotka will continue on an expansionary fiscal trajectory in 2015-2016. Nevertheless, the government has ample fiscal space to finance higher expenditure, and we do not expect to see deterioration in market perceptions of its sovereign risk profile.
* We reiterate our view that the country will continue to post modest current account deficits for the foreseeable future. The country's status as a regional safe haven will ensure that stable financial inflows continue to cover the country's external financing needs.

Full Report Details at
- http://www.fastmr.com/prod/924065_czech_republic_business_forecast_report_q1_2015.aspx?afid=301

Major Forecast Changes

* Having previously expected a weaker target for the koruna, we now expect the Czech National Bank (CNB) to maintain its current monetary policy stance in 2015. The CNB has signalled it will tolerate below-target inflation in the coming quarters, underpinning our re-assessment.

Risks To Outlook

* A more pronounced slowdown in eurozone economic growth and in particular in Germany would have a negative effect on the Czech Republic's economic growth trajectory. Owing to the high degree of trade integration with Germany, the Czech Republic's economic recovery remains highly dependent on external demand remaining relatively receptive to Czech exports.

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The Czech Republic Business Forecast Report helps businesses with market assessment, strategic planning and decision making to promote growth and profitability in Czech Republic and is an essential tool for CEOs, Chairmen, Finance Directors/CFOs, Managing Directors, Marketing/Sales Directors with commercial interests in this emerging market.

An influential new analysis of Czech Republic's economic, political and financial prospects through end-2018, just published by award-winning forecasters, Business Monitor International (BMI).

Key Uses

* Forecast the pace and stability of Czech Republic's economic and industry growth through end-2018.
* Identify and evaluate adverse political and economic trends, to facilitate risk mitigation.
* Assess the critical shortcomings of the business environment that pose hidden barriers and costs to corporate profitability.
* Contextualise Czech Republic's country risks against regional peers using BMI's country comparative Risk Rankings system.

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