Now, for the first time in almost a year and a half, the sentiment for emerging Europe and its related exchange traded fund (ETF) has entered into positive territory. The Sentiment Indicator published by ZEW Center for European Economic Research and Erste Bank says that the sentiment for the emerging Europe region is positive. The index measures investor and analyst expectations for eastern Europe in the next six month, explains Edward Hugh for Seeking Alpha.
Evidently, lower interest rates in western Europe may feed through to increased demand for exports from eastern Europe while stimulus efforts in individual eastern countries will further help economic growth. The recovery stats are in place, but the economy does have a way to go before growth will take over.
Meanwhile, global economic growth is projected to fall 1.3% this year, the first negative global growth in the post-war period. Global trade is likely to contract 11%, reports D. Srul Ajoo for Bernama. Asia may be looking at a better turnaround thanks to limited exposure to toxic assets. But Europe’s vulnerability came from exposure to toxic assets from the United States’ rapid credit growth as well as large current account deficits in emerging Europe.
- SPDR S&P Emerging Europe (GUR): up 33.7% year-to-date
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