Bank Austria´s baseline macro outlook for next year is positive, characterized by a continued recovery in economic activity, a moderate increase in inflation pressures, narrowing budget deficits and manageable external financing requirements. From 3.6% 2010, the bank sees growth of 3.8% in 2011 and for the first time in 4 years, all countries in their sample should enjoy gains in economic activity. While EMU peripheral woes rumble on, only in the case of a very severe deterioration from here would the bank turn concerned about their impact on CEE economic activity. In some of the stronger economies output gaps will close over the course of 2011.
CEE economies continue to consolidate fiscal policy. From a regional average of 5.3% of GDP 2010, Bank Austria expect an average budget deficit of 4.7% of GDP 2011.
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