According to an article in Financial Times Central and eastern European markets have been the strongest performers in the world in the past six months, in a sharp turnround of fortunes as the concerns of investors have switched to the mounting debts in the developed world. In contrast to eurozone members, such as Greece, which saw a collapse in its bond markets last week, investors have been impressed by the performance of the region’s stronger economies, such as Poland, as well as those that have been assisted by the IMF, such as Hungary and Latvia. Shahin Vallee, emerging market strategist at BNP Paribas, said: “This is a story of public finances. If you compare Hungary and Greece, then Hungary, the emerging market country, is a safer bet.”
Marcus Svedberg, chief economist at investment company East Capital, said: “Eastern Europe does not have a structural debt problem. The average amount of government debt in the region is around 40 per cent of GDP [gross domestic product] compared with the eurozone’s 80 per cent of GDP.” However, analysts warn that eastern Europe could be derailed by the debt problems in the industrialised world and the stalling of the global recovery. Read more in the FT-article here.