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Wednesday, November 15, 2006

From The Analysts

Portfolio Hungary published some of the analyst comments on the third quarter GDP data. István Zsoldos from Goldman Sachs seems pretty much to the point:

“The impact of the fiscal restrictions (which started in September) is still fairly limited in the Q3 figures."

“Wage growth was very strong before the September wage tax increases, and in our view that was the reason why consumption is probably still holding up (there is no detailed breakdown published at this release)."

“Private sector investment was surprisingly weak in Q2, and this component might have shown a rebound in Q3 as well."

“Overall, the Q3 data is going to be less important than the later quarters because the most significant question is how households are going to react to the full impact of the fiscal tightening. We expect to see signs of a serious slowdown in the Q4 data."

So the impact of the tightening is yet to make itself felt. Raffaella Tenconi from Dresdner Kleinwort seems excessively optimistic:

“Given the prospects for continuing buoyant eurozone growth, which will support exports, and rapid wage growth, supportive of consumer demand, growth is likely to decelerate only gradually in the near term."

The outlook for eurozone growth is much more uncertain, in particular see this from Claus Vistesen.

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