Sponsored Links
Public finances of the central European countries are likely to deteriorate over the next year compared to their 2008 levels as a result of the global slowdown, Fitch Ratings said in a report Monday.
The firm said the average government debt of three central European countries including Poland, Hungary and the Czech Republic, is likely to rise by 10 percentage points of GDP by 2010 compared with 2008 levels. "The marked deterioration in public finances in these countries could lead to negative rating actions if they fail to identify and implement credible medium-term fiscal consolidation programs. In all three countries, politics and electoral cycles add to the risk of fiscal slippage, " David Heslam of Fitch said.
Czech's general government deficit is forecast to be 6% of GDP in 2009 compared to 1.4% in 2008. Fitch expects the deficit to widen to 7% beyond 2010, if the country does not make amendments to its 2010 budget. Moreover, it forecasts the debt ratio to rise by 10.9 p.p of GDP, with debt being 40.8% of GDP next year.
"Uncertainties related to the timing of general elections, the final size of the 2010 deficit target and ability of the next government to tighten fiscal policy constitute risks to the medium-term budget outlook.", Fitch said.
In Hungary, Fitch expects the fiscal policy to be guided by the IMF's commitments, with the government targeting a 0.1 p.p reduction in the 2010 budget deficit to 3.8% of GDP, which Fitch considers realistic.The government debt is forecast to rise by 10 p.p of GDP between end-2008 and end-2010 to 82.5% of GDP, and the firm said with this elevated level of debt, the country has little room for policy slippage or for absorbing further negative shocks.
In Poland, the government debt ratio is forecast at 56.3% of GDP in 2010, a rise of 9.1 p.p compared with end-2008, broadly in line with the average forecast rise for sovereign's rated in the 'A' range Fitch said. General government deficit is forecast to be 5.5% of GDP this year and 6.3% in 2010, making a delay to potential euro adoption beyond Fitch's previous forecast of 2013 likely. "A heavy election schedule, with presidential elections due in 2010 and general elections in 2011, add to the risks for the medium-term budget outlook", the firm added.
0 komentar:
Post a Comment