By Dasha Afanasieva
Central European markets have studied hard to impress investors, says Angela Merkel, but have they passed the test?
In Davos on Thursday, the German chancellor urged business leaders to head for the region:
I’m saying this to investors who are pondering investment in Europe: Central and Eastern Europe has done, almost flying below the radar, a lot of reforms… Look at the investment climate in Europe; it has changed for the better.
But the region did not look so rosy to investors this week.
The Polish stock index was down more than 1.2 percent. Data out on Thursday showing the biggest drop in retail sales in almost eight years prompted more calls to cut the interest rate again, and sent the zloty lower on the day.
Hungarian shopaholics too stayed on the wagon at the end of last year. Retail sales there fell 4.1 percent in November year-on-year, according to fresh data which pushed the forint to a new seven-month low as investors expected further rate cuts. Hungarian markets also have to contend with uncertainty over central bank policy in anticipation of a leadership change at its central bank in March.