CEE region funding challenges
CEE region funding challenges
Context
Before the Covid-19 outbreak, CEE economies were enjoying relative economic stability, but potential growth forecasts in the region were deteriorating. In addition, there was a persistent investment gap in the region, particularly for Non-Financial Companies (NFCs).
The economic impacts of the current sanitary crisis will need to be evaluated, however the trends above mean that the growth and financing model of the region will need to evolve in the coming years. The growth model in the region involved a great deal of foreign investment going into labour-intensive industries and infrastructures, as well as portfolio capital coming into foreign-owned banks, both of which are expected to diminish in the future.
Financing infrastructure and manufacturing plants will remain a priority, but there will be a need to place a greater emphasis on domestically driven productivity growth and the financing of more innovative, technology-intensive and high-growth industries.
This will require developing workforce skills and a higher capacity to invest in intangible assets, which would involve a greater recourse to capital market funding, the development of which is however challenging.
Contributions to the policy debate
Extracted from the main Eurofi publications (Regulatory Updates, Views Magazines and Conference Summaries)
Key Eurofi
documents
Public and private
sector views
Public authority views
P. Heilbronn - EBRD - CEE capital markets in the post-crisis environment - April 2020
B. Angel - EU Commission DG EcFin - Re-igniting investment in CEEs - April 2019
D. Revoltella - EIB - Financing and investment gap in CESEE - April 2019
P. Paluš - Slovak Republic - Need to route investments towards new trends - April 2019
Industry views
I. Gažić - Zagreb Stock Exch - Croatia: leading the capital markets development in CEE - April 2020
S. van Groningen - Raiffeisen Bank - Joint forces in CEE - April 2019
L. Anghel - Bucharest Stock Exchange - Romanian capital market developments - April 2019
S. Oprescu - Ass. of Romanian Banks - Closing gaps – between reality and outlook - April 2019