Economic Outlook in the time of change in CEE

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1 Economic Outlook in the time of change in CEE 10 years of Extor Group Warsaw, October 2015

2 Warsaw, October, European Union and Eurozone Source: economicfocus.blogspot.com

3 Warsaw, October, GDP. Economic growth European Union and Eurozone Poland vs. European Regions* 6,0 4,0 2,0 0,0-2,0-4,0-6,0 Lehman Brothers buncruptcy begining of the world crisis A rebound in the GDP dynamics 8,0 6,0 4,0 2,0 0,0-2,0-4,0-6,0-8,0-10,0-12,0 European Union (28 countries) Source: Eurostat. *Regions based on United Nations division. Eurozone Western Europe Eastern Europe Northern Europe Southern Europe Poland

4 2005Q1 2005Q3 2006Q1 2006Q3 2007Q1 2007Q3 2008Q1 2008Q3 2009Q1 2009Q3 2010Q1 2010Q3 2011Q1 2011Q3 2012Q1 2012Q3 2013Q1 2013Q3 2014Q1 CEE ECONOMIC TRENDS Warsaw, October, GDP per capita evolution over last 10 years European Union and Eurozone (values in EUR) Poland vs. European Regions (values in EUR) European Union (28 countries) Eurozone Western Europe Eastern Europe Northern Europe Southern Europe Poland Source: Eurostat. *Regions based on United Nations division, values in EUR.

5 Warsaw, October, Government Debt Percentage of GDP European Union and Eurozone Poland vs. average for European Regions* 80,0 70,0 75,0 Eurozone crisis 60,0 70,0 65,0 60,0 55,0 Lehman Brothers buncruptcy begining of the world crisis 50,0 40,0 30,0 50,0 20,0 45,0 10,0 40,0 0,0 European Union (28 countries) Eurozone Western Europe Northern Europe Poland Eastern Europe Southern Europe Source: Eurostat. *Regions based on United Nations division

6 2010M M M M M M M M M M M M M M M M M M M M M M M M M M M M M M M M M M M M M M M M M M01 CEE ECONOMIC TRENDS Warsaw, October, Inflation. Harmonized Index of Consumer Prices 3,5 3,0 2,5 2,0 1,5 1,0 0,5 0,0-0,5-1,0 Harmonised Consumer Price Index Global drop in inflation rates 5,0 4,0 3,0 2,0 1,0 0,0-1,0-2,0 Poland vs. average for European Regions* European Union (28 countries) Eurozone Western Europe Eastern Europe Northern Europe Southern Europe Poland Source:Eurostat. *Regions based United Nations division

7 Warsaw, October, Exchange rates 1,2 1,1 1 0,9 0,8 0,7 0,6 SNB's Decision to abandon EUR- CHF floor 7,5 7 6,5 6 5,5 5 4,5 4 3,5 3 2,5 USD/EUR (left axis) USD/CHF(left axis) USD/PLN (right axis) USD/CNY (right axis) Source: Stooq.

8 Warsaw, October, Capital Market - Key stock indices WIG20 DAX PX BUX BET Source: Stooq.

9 Warsaw, October, Basic interest rates of Central Banks Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Extended period of low interest rates Poland Hungary Czech Republic Romania In march, the Polish Monetary Policy Council has decided to lower the interest rate by 50 b.p. The reference rate stands now at 1.50% Source: NBP, The Central Bank of Hungary, The Czech National Bank, National Bank of Romania Eurostat.

10 2010M M M M M M M M M M07 CEE ECONOMIC TRENDS Warsaw, October, Unemployment Rate Unemployment Rate (Eurostat definition) Situation on labor markets in the CEE region has improved in The unemployment rate was falling in all countries, however in the majority of them it still remained higher then before the crisis. Unemployment rates in the CEE region: Hungary 7.3%; Czech Republic 5.9%; Romania 7.1% European Union (28 countries) Czech Republic Romania Poland Hungary Source: Eurostat.

11 Warsaw, October, European Funds utilisation in EU strategies in Poland bln EUR bln EUR 2% 4% 25% 10% 42% 5% 1% 1% 4% 13% 19% 60% 15% Infrastructure and Environment Human Capital Innovative Economy Technical Support 16 regional programs Eastern Poland Development European Territorial Cooperation Infrastructure and Environment Digital Poland Eastern Poland Intelligent Development Knowledge, Educatiom, Development Technical Support Source: GUS, mir.gov.pl

12 Human Development Index Warsaw, October, ,00 UN PROJECTIONS 0,95 0,90 0,85 0,80 The Human Development Index (HDI) is a summary measure of average achievement in key dimensions of human development: a long and healthy life, being knowledgeable and have a decent standard of living. The HDI is the geometric mean of normalized indices for each of the three dimensions. 0,75 0,70 0, Poland Hungary Czech Republic Romania Source:

13 Warsaw, October, Basic data for selected European Countries Country GDP (USD billion)* Inflation rate (y/y) Industrial output (annual change) Central Bank Rates EUR/currency Unemployment rate Poland 548-0,6% 5.3% 1.50% % Czech Republic % 4.7% 0.05% % Hungary % 4.6% 2.10% % Romania % 2.1% 2.25% % Estonia % 7.9% 0.05% Eurozone 7.7% Bulgaria % 1.4% 0.01% % Croatia % 5.3% 5.00% % Sweden % -1.0% -0.10% % Austria % -0.1% 0.05% Eurozone 5.0% Source: Eurostat.

14 Warsaw, October, Prepared by DFCM Research and Analysis Unit Jarosław Dąbrowski CEO Tel.: DF Capital & Management Sp. z o.o. Aleje Jerozolimskie 134, X piętro Warszawa Tel

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