Economic performance of GermanyCentral and Eastern European countries closing the gap The Hungarian Viewpoint

PROFESOR RPD KOVCSUNIVERSITY OF SZEGED

FISCAL COUNCILHUNGARIAN ECONOMISTS ASSOCIATION

2013 spring

Snapshot: Economic forecasts of 2013 in Hungary and the surrounding countries, fiscal environments

Broader outlook: Business contexts home and abroad, the pull of the german economy

Hopes and chances: The possibility of a virtous circle, conditions of stability and growth in Hungary and surrounding countriesTable of contents

Snapshot: Economic forecasts of 2013 in Hungary and the surrounding countries, fiscal environments

2. Broader outlook: Business contexts home and abroad, the pull of the german economy

Hopes and chances: The possibility of a virtous circle, conditions of stability and growth in Hungary and surrounding countries.

Table of contents

According to the European Council, the CEE countries look forward to a better yearSource: European Commission (EC), *: EC Winter 2013 macroeconomic forecast (February 2013); annual average changes, %; except unemployment (%)Growth can become strongerInflation rates can sinkBut unemployment rates can stay relatively highExportdynamics can speed up significantly

Since the autumn forecast of the EU, growth outlooks have worsened, so the fiscal plans look less bright as wellSource: European Commission (EC), Autumn 2012 forecast November 2012; Winter 2013 forecast February 2013Change in growth forecasts (year/year, %)Fiscal forecasts (as a % of GDP)

1,601,511,073,244,003,882,123,926,446,653,4413,331,775,334,542,011,301,562,101,431,604,675,347,25Source: EUROSTATYields of long term government bonds in the EU27 countries, 2012 december, %A welcome sight, that due to the low international rates, investors are looking for government bonds with relatively high rates

thus the CDS spreads could decrease. It also warns us that the attention of the investors can quickly changeSource: KK, REUTERS

Yields of 10 year government bonds (%)CDS spreads (basepoint)

Snapshot: Economic forecasts of 2013 in Hungary and the surrounding countries, fiscal environments

Broader outlook: Business contexts home and abroad, the pull of the german economy

Hopes and chances: The possibility of a virtous circle, conditions of stability and growth in Hungary and surrounding countriesTable of contents

Foreign Trade between Hungary and Germany, Austria; investments from said countries to HungarySource: MNB, KSHHungarys foreign trade with Germany and Austria (EUR bn) (bzispont)Foreign direct investment in Hungary (EUR bn)Export ranking (2012):

Germany 1stRomania 2ndSlovakia 3rdAustria 4th

Import ranking (2012):

Germany 1stRussia 2ndAustria 3rd

Invesments ranking (2012):

Germany 1stThe Netherlands 2ndAustria 3rd

Source:EUROSTAT

Import

0.03033918790.02822265010.02828783080.02864300230.0302496327

0.0048138980.00424056410.00397706060.00414003470.0046866816

0.04708406810.04717383320.05020798680.05276751130.0530518959

0.00234559950.00158459070.00186036160.002101490.0023404502

0.00403579650.00304270590.00330990010.00371807580.004049176

0.00227501270.00162806530.00178557570.00223977410.0025077682

0.06534231330.06161823940.06710549890.06847974680.0656819404

0.01515724740.0137886610.01396260190.01535096580.0157244259

0.00695814650.00641794980.00652007770.00684204610.0066735771

0.01596655470.01417778260.01586091120.01741568120.0182439511

2008

2009

2010

2011

2012

Import from Germany in the EU10 countries, % of total German Import

Export

0.03694815570.03449168750.03479201070.03436745940.0340386509

0.00261070310.0030066890.00320841030.00407763360.0036061279

0.05753029640.05986002640.0627754390.06526909870.0648315292

0.00080988920.00090039220.00087927010.00095288080.0009571716

0.00217245050.00260055330.00299246690.00324521780.0030432386

0.00098536430.00102581220.00113184930.00124231520.0013090169

0.0547689230.05824239570.06084046930.06123538860.0608070564

0.01044200260.01238282660.01308590420.01458244960.0142033534

0.00817549980.00829821680.00823431470.0086036170.0084717903

0.01779570030.01789258870.0179771660.0198772010.0226559746

2008

2009

2010

2011

2012

Export to Germany from the EU10 countries, % of total German Export

Data

EU27 Trade Since 1988 By SITC [DS-018995]

Extracted on21.03.13

Source of dataEurostat

PARTNERGERMANY

PRODUCTTOTAL

INDICATORSVALUE_IN_EUROSrszarnyok

import NmetorszgblImport

FLOWREPORTER/PERIODJan.-Dec. 2008Jan.-Dec. 2009Jan.-Dec. 2010Jan.-Dec. 2011Jan.-Dec. 201220082009201020112012

IMPORTHUNGARY18,828,269,26213,790,993,32315,908,904,86217,545,884,02018,303,038,3123.0%2.8%2.8%2.9%3.0%

IMPORTBULGARIA2,987,468,4782,072,150,9612,236,674,8262,536,066,8592,835,753,8560.5%0.4%0.4%0.4%0.5%

IMPORTCZECH REPUBLIC (CS->1992)29,220,014,52223,051,485,86328,236,667,97032,323,868,27932,099,923,1144.7%4.7%5.0%5.3%5.3%

IMPORTESTONIA1,455,661,183774,310,0031,046,256,1291,287,312,6511,416,127,9180.2%0.2%0.2%0.2%0.2%

IMPORTLITHUANIA2,504,584,6261,486,817,7231,861,467,8032,277,586,9102,450,020,6040.4%0.3%0.3%0.4%0.4%

IMPORTLATVIA1,411,855,591795,553,8521,004,196,9921,372,021,5411,517,366,4510.2%0.2%0.2%0.2%0.3%

IMPORTPOLAND40,550,942,65730,109,742,58337,739,726,55941,948,734,38739,741,939,4836.5%6.2%6.7%6.8%6.6%

IMPORTROMANIA9,406,472,4196,737,826,9477,852,482,8379,403,562,6069,514,322,7771.5%1.4%1.4%1.5%1.6%

IMPORTSLOVENIA4,318,172,7913,136,130,0963,666,852,2314,191,241,7364,037,957,7290.7%0.6%0.7%0.7%0.7%

IMPORTSLOVAKIA9,908,722,4206,927,971,1298,920,080,47810,668,348,20211,038,802,9721.6%1.4%1.6%1.7%1.8%

IMPORTEU27620,592,393,858488,649,836,137562,393,949,264612,571,400,504605,066,465,096100.0%100.0%100.0%100.0%100.0%

Export

export Nmetorszgba20082009201020112012

EXPORTHUNGARY19,577,859,70815,147,495,19217,986,965,11319,850,516,85620,073,923,3943.7%3.4%3.5%3.4%3.4%

EXPORTBULGARIA1,383,343,1651,320,428,5131,658,701,6212,355,226,0382,126,674,6120.3%0.3%0.3%0.4%0.4%

EXPORTCZECH REPUBLIC (CS->1992)30,483,796,84826,288,347,37832,453,991,80737,699,188,85738,233,687,7635.8%6.0%6.3%6.5%6.5%

EXPORTESTONIA429,139,093395,419,502454,569,900550,380,396564,481,5120.1%0.1%0.1%0.1%0.1%

EXPORTLITHUANIA1,151,124,5971,142,068,4501,547,061,9971,874,425,7181,794,716,7890.2%0.3%0.3%0.3%0.3%

EXPORTLATVIA522,118,749450,499,415585,149,700717,556,667771,978,4730.1%0.1%0.1%0.1%0.1%

EXPORTPOLAND29,020,617,43625,577,942,79231,453,640,54435,369,332,91635,860,298,7975.5%5.8%6.1%6.1%6.1%

EXPORTROMANIA5,532,943,6035,438,087,2456,765,222,7318,422,768,7228,376,272,8731.0%1.2%1.3%1.5%1.4%

EXPORTSLOVENIA4,331,983,1783,644,275,1334,257,021,2884,969,417,2044,996,145,9820.8%0.8%0.8%0.9%0.8%

EXPORTSLOVAKIA9,429,475,3527,857,774,4599,293,934,18611,480,997,43913,361,114,1021.8%1.8%1.8%2.0%2.3%

EXPORTEU27529,873,801,649439,163,644,828516,985,501,383577,596,284,246589,739,101,074100.0%100.0%100.0%100.0%100.0%

Source:EUROSTAT

Import

0.03033918790.02822265010.02828783080.02864300230.0302496327

0.0048138980.00424056410.00397706060.00414003470.0046866816

0.04708406810.04717383320.05020798680.05276751130.0530518959

0.00234559950.00158459070.00186036160.002101490.0023404502

0.00403579650.00304270590.00330990010.00371807580.004049176

0.00227501270.00162806530.00178557570.00223977410.0025077682

0.06534231330.06161823940.06710549890.06847974680.0656819404

0.01515724740.0137886610.01396260190.01535096580.0157244259

0.00695814650.00641794980.00652007770.00684204610.0066735771

0.01596655470.01417778260.01586091120.01741568120.0182439511

2008

2009

2010

2011

2012

Import from Germany in the EU10 countries, % of total German Import

Export

0.03694815570.03449168750.03479201070.03436745940.0340386509

0.00261070310.0030066890.00320841030.00407763360.0036061279

0.05753029640.05986002640.0627754390.06526909870.0648315292

0.00080988920.00090039220.00087927010.00095288080.0009571716

0.00217245050.00260055330.00299246690.00324521780.0030432386

0.00098536430.00102581220.00113184930.00124231520.0013090169

0.0547689230.05824239570.06084046930.06123538860.0608070564

0.01044200260.01238282660.01308590420.01458244960.0142033534

0.00817549980.00829821680.00823431470.0086036170.0084717903

0.01779570030.01789258870.0179771660.0198772010.0226559746

2008

2009

2010

2011

2012

Export to Germany from the EU10 countries, % of total German Export

Data

EU27 Trade Since 1988 By SITC [DS-018995]

Extracted on21.03.13

Source of dataEurostat

PARTNERGERMANY

PRODUCTTOTAL

INDICATORSVALUE_IN_EUROSrszarnyok

import NmetorszgblImport

FLOWREPORTER/PERIODJan.-Dec. 2008Jan.-Dec. 2009Jan.-Dec. 2010Jan.-Dec. 2011Jan.-Dec. 201220082009201020112012

IMPORTHUNGARY18,828,269,26213,790,993,32315,908,904,86217,545,884,02018,303,038,3123.0%2.8%2.8%2.9%3.0%

IMPORTBULGARIA2,987,468,4782,072,150,9612,236,674,8262,536,066,8592,835,753,8560.5%0.4%0.4%0.4%0.5%

IMPORTCZECH REPUBLIC (CS->1992)29,220,014,52223,051,485,86328,236,667,97032,323,868,27932,099,923,1144.7%4.7%5.0%5.3%5.3%

IMPORTESTONIA1,455,661,183774,310,0031,046,256,1291,287,312,6511,416,127,9180.2%0.2%0.2%0.2%0.2%

IMPORTLITHUANIA2,504,584,6261,486,817,7231,861,467,8032,277,586,9102,450,020,6040.4