Macroeconomic projections from Hypo Bank and Bayern LB predict continued economic uncertainty in almost all global economies. They do not consider inflation a problem, particularly emphasizing the better preparedness of central banks compared to governments. Projections for Croatia are much more pessimistic than those of the government and predict a GDP decline of 2.5 percent.
At a conference organized by Hypo Bank, lectures were held today by the chief economists of Bayern LB, Jurgen Pfister, and Hrvoje Stojić from HAAB. Pfister titled his presentation the same as the one held six months ago – Long road to recovery part II, indicating that the main macroeconomic indicators are largely the same and there is no hope for a quick recovery of the major global economies. – The recovery in industrial countries will be quite slow because this recession differs from previous ones in that it did not arise from an overheating economy but from structural problems – said Pfister, adding that this year developed countries can expect a new wave of losses resulting from the write-off of toxic assets (primarily securities linked to real estate in the U.S.). Pfister believes that demand for cheap money will weaken in 2010.
Bayern LB does not envision China as the future locomotive of the global economy that should replace the U.S., primarily because net import rates are still low, and in volume, the Chinese economy is still three times smaller than the American one. – The growth of the American economy can no longer be driven by personal consumption, so a large deficit could be a complicating factor – believes Pfister. The European Union, according to Pfister, can expect rising unemployment, and if something is not done soon, especially in the countries most affected by the crisis (Greece, Spain, Ireland, Portugal) regarding wage reductions, it will be difficult to achieve recoveries. – Of course, the threat to this is strong unions that will not allow it – believes Pfister. The chief economist of Hypo Bank, Hrvoje Stojić, provided a forecast for Croatia in which he outlined that fiscal issues are in focus, as the state generates as much as 18 percent of GDP. – Household consumption will continue to stagnate, as will loans to individuals and companies. Lower interest rates, caused by the release of additional liquidity by the HNB, could encourage some companies to borrow, which they were previously reluctant to do due to high capital costs – said Stojić. He believes that real estate prices are overvalued by about 20 percent and therefore does not expect improvement in that sector. He assesses that the exchange rate of the domestic currency of HAAB will remain stable, and the upcoming entry into the EU could positively impact the economy. (Amir Kulenović)
