Experts Discuss Outlook for Domestic and European Economies

Experts discuss outlook for domestic and European economies

Prague, 1 March 2013 – The current state and future development of the Czech economy were the focus of yesterday’s 11th Annual CFA Society Forecasting Dinner 2013. This annual gathering of top financial professionals hosted by the CFA Society Czech Republic takes place every year under the auspices of the Governor of the Czech National Bank. About 220 representatives of banks, other leading financial institutions and corporations from the Czech Republic and Slovakia participated in this year’s gala evening.

Jesper Berg, Vice President of the Danish financial services group Nykredit Realkredit gave one of the keynote speeches. Among other points, he said the financial crisis was the result of factors such as past macroeconomic policies by governments, the tendency of the financial system to create booms and busts, and the failure of all “checks and balances”. As a result, we are now seeing a tightening of financial regulation. That makes sense for the long run, he noted, but the timing is very unfortunate given that fiscal and monetary policy are stretched. “At the European level we have gone from a situation, where the banks have dragged down sovereigns to a situation, where sovereigns have dragged down banks. Our best hopes in the short term are attached to the US and in the longer term to Europe’s burning platform,” Jesper Berg added.

This year’s gathering, as the last, took place in the congress centre of the Czech National Bank under the auspices of Governor Miroslav Singer. In his address, Mr. Singer focused on the current state and outlook for the domestic economy: “The CNB assumes the domestic economy is in a cyclical trough at the moment. Economic growth should resume this year and we expect it to reach approximately 2 per cent for the whole of next year. The economy will act in a counter-inflationary manner through the first half of 2014. However, the CNB will not start hiking rates until inflationary pressures pick up substantially.”

The third featured speaker together with Jasper Berg and Miroslav Singer was Tomáš Sedláček, a renowned Czech economist. He had this to say regarding the topic: “It is said that the economy is depressed. That is just the one side of the story. Economy is misdiagnosed, it is manic depressed. Where is this mistake leading us? If we ask questions such as: ‘Is capitalism working? How to get back on a growth path?’ Well, first of all we should ask whether we ask right questions. Is capitalism working the way we want it to work? Why do we need growth? Isn't it just a fetish we created on the way to ‘paradise’?”

During the evening, Jan Herzmann, Executive Director of ppm factum research, presented results of a survey held for the CFA Society Forecasting Dinner 2013 by Donath Business & Media and ppm factum research. Respondents from the ranks of financial analysts, leading domestic and foreign economists and executives pointed out, inter alia, that the start of construction on two new reactor units at the Temelín nuclear power plant could help the Czech economy grow. However, the professional public strongly (69 %) agree that the government should not provide the plant’s operator with a guaranteed minimum electricity price.

The CFA Society Czech Republic () is an association of financial professionals founded in April 2002 in the Czech Republic. As one of the 138 member societies of CFA Institute ( its mission is to promote the highest standards of professional excellence, integrity and ethics within the Czech investment community. The society currently has over 130 members, mostly CFA charterholders, and almost 800 candidates from the Czech Republic and Slovakia registered in the CFA Program. The society's partners are: Ernst & Young, ČSOB Asset Management and ING Investment Management. Partners for the Forecasting Dinner 2013 are Donath Business & Media and ppm factum research. Media partners for the event are Český rozhlas Radiožurnál, Ekonom, iHNed.cz, Hospodářské noviny a Fleet Sheet’s Final Word.

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