Redgate Capital’s Chief Investment Officer and Fund Manager Andrei Zaborski commented that the last quarter of the last year and the first quarter of this year show the economic growth due to the good inertia, but the sharp decrease can be expected in the second half of the year.
Zaborski said that in some parts of the infrastructure investments we can already see sharp decline in the amount of orders.
He noted that domestic consumption and construction (including investing money that was received from the sale of CO2 quota) have led to the economic growth in the last 3-4 quarters. Industrial production has rather declined, also some other value-added sectors, including transit and real estate, are rather weak. “The weak economic state of the biggest export partners does not give much hope. What adds to the unpredictability is that we are running out of the financial aid due to the expiry of the EU budget plan – all the biggest projects must be finished in 2014 and there are no new large projects,” said Zaborski.
On the positive side – the consumption party has not yet ended. It is expected for the EU economy to slowly recover in the second half of 2013; local banks are full of deposit money, waiting to be used, and the public sector is once again ready to spend more, allowing salary increases for many state workers.
In general, the European economy will remain being weak, said Zaborski. Also, the economy of our main partners, Scandinavia and Germany, will also slow down. “The only promising region could be China – if the positive indicators of the past months will turn into economic growth, the impact can be felt through the international trade and the increase of commodity prices,” added Zaborski.
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