ECONOMY

In Brief

Central and Eastern Europe to slow down Central and Eastern European economies face «a significant slowdown» and widening current account deficits as a result of the global credit crisis and slower demand from Western Europe, the International Monetary Fund (IMF) said. Growth in the region will probably slow to about 4.5 percent this year from 6 percent in 2007 and decline further to 3.4 percent in 2009, the IMF said in its World Economic Outlook yesterday. «A significant slowdown appears in the offing,» the IMF wrote in the report. «Weaker external demand, especially owing to the cooling of demand in Western Europe, and tighter external financing conditions are weighing on investment and exports, while private consumption has slowed in the face of soaring food and energy prices.» A freeze in global credit markets is provoking international investors to flee Eastern Europe after years of sustained growth, slowing inflation and dwindling borrowing costs. Capital inflows are starting to slow, borrowing costs are rising and governments must cut spending and cool private lending growth, the IMF said. The IMF predicted in yesterday’s report that current account deficits in Central and Eastern Europe, including Turkey, will widen to about 7.1 percent of gross domestic product this year from 6.6 percent last year and 7.2 percent of GDP in 2009. (Bloomberg) Building permits fall 9.3 percent y/y in July Greek construction activity, measured by the number of new building permits, fell 9.3 percent in July from a year earlier, the National Statistics Service (NSS) said yesterday. In a statement, the NSS said 7,846 new permits were issued nationwide in July, corresponding to 2.01 million square meters, versus 8,652 permits a year earlier, which regarded 2.39 million square meters. A total of 40,512 new permits were issued around the country in the January-July period, down 16.8 percent from the same period a year earlier, amounting to 10.573 million square meters, according to the NSS. (Reuters) Energy assets Romanian Prime Minister Calin Tariceanu authorized the creation of a holding company for half the state’s energy assets as a step toward privatization. The company, to be named Electrica SA, will include the last three remaining state electricity distributors and other energy assets, Tariceanu said at a news conference in Bucharest yesterday. «This company will be sold to portfolio investors and not strategic investors,» he said. «We don’t want to just hand an extremely tempting company out on a platter. I expect a series of negative comments, especially from competitors who want to snatch a few more assets.» (Bloomberg) Trading halts Romanian stock exchange trading remain halted yesterday after the benchmark index fell to a four-year low, and trading is set to resume today, its head said. «After consultations with brokerage houses, we decided that it is better to keep trading halted today and to resume it on Thursday,» Stere Farmache said. «A pause to allow investors better to digest the realities of world financial markets is welcomed.» (Reuters)