Several distinct patterns have become evident across Central and Eastern Europe during the third quarter.
First, economists have downgraded the indebted eurozone states along with other EU and non-EU countries with close trade and capital links to the single currency area including Poland, Romania and the Czech Republic. Growth prospects have worsened and this is not helping fiscal budgeting.
Second, experts have upgraded all three Baltic states Estonia, Latvia and Lithuania where economic and financial connections to safe-haven Sweden are helping. Swedish banks have a strong foothold in the region, and there are also fewer of the economic concerns regarding growth and public finances that are apparent in other parts of Europe due to better economic management.
Third, Turkey, one of the regions main investment attractions, has become safer, rising by 2.4 points this quarter, in spite of the border security problems caused by Syrias conflict. All three measures of its risk profile economic, political and structural have improved this year, and the sovereign has climbed eight places in the rankings since Q2 2012, to 47. Turkeys 109-place jump in the rankings since the survey began 20 years ago is the most of any of ECRs 186 surveyed countries.