Business Economic Forecast 2011

Both EUROCHAMBRES Economic Survey 2011 and BUSINESSEUROPE´s Economic Outlook for 2011 indicate that businesses are confident that the worst is behind and the economic situation will improve next year.

Economic activity has been gradually strengthening, even more than expected throughout 2010. The recovery is mainly pushed by strong exports and driving industrial production. Moreover, the labour market is stabilizing more quickly than expected.

The anticipations on GDP growth in the EU has been adapted by BUSINESSEUROPE from 1.1% to 1.8% in 2010 and 1.7% in 2011 compared with the EC forecast expecting GDP grow by 0.75% in 2010 and 1.5% in 2011. The recovery has been particularly evident in Germany, Sweden, Poland and Finland. On the other hand, Greece, Romania, Latvia, Spain and Ireland have suffered from negative growth.

Nevertheless, it is essential to keep working on progress, mainly by introducing reforms that would reduce public debt and by focusing on public deficits of member countries and improvements in product, labour and capital markets. The potential lies in labour market where it is estimated that 600,000 new jobs will be created in 2011. However, in 2011, many temporary anti-crisis measures will come to an end, and national governments will be obliged to implement the austerity measures foreseen in the framework of the new European economic governance. Access to finance remains the most important problem for companies. Expectations for the Czech Republic are even more favorable than average expectations for the whole EU, according to the Economic Outlook 2011.

Estimations in the GDP growth have attained 1.6% in 2010 and 2.3% in 2011. However, the inflation rate is also expected to grow from 1.6% in 2010 to 2.5% in 2011. Trend in business climate is expected to be positive for industry while trend in profitability will probably be negative for services.