The Crisis Bypassing Central and Eastern Europe?
The financial crisis and especially the struggle of the banking sector is not hitting Central and Eastern Europe as hard as some have expected.
As the financial crisis spreads world-wide, governments move to guarantee all or nearly all private savings accounts, central banks are lowering interest rates, the stock markets are plunging, consumer spending is falling and growth rates are declining. Czech Republic is not an exception. But, luckily, for several reasons, the impacts have not been as severe as in other place in the world.
What are some of the reasons?
Together with other Central and Eastern European countries, the Czech Republic has joined the European Union in 2004 but has not accepted the Euro yet. This gives the central banks more flexibility and a direct independence on the swings of Euro.
Strict credit standards avoided bad loans and thus a possible subprime crisis.
The small and young stock markets have relatively small exposure to the world economy.
Czech Republic has encountered a steep economic growth in recent years with the Czech currency (Crown) being the world's fastest growing currency. This upswing is only now leisurely slowing down.
Speculations of other reasons can be found in a short interesting NY Times article: http://www.nytimes.com/2008/10/09/business/worldbusiness/09euroeast.html?ref=economy
Thank you for reading and any comments!