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Economic Growth Remains High In The New Eu Member States Despite Recent Global Financial Market Turbulence, But Attention Should Be Paid To Persistent Medium Term Challenges.

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M2 PRESSWIRE-28 September 2007-WORLD BANK GROUP: Economic Growth Remains High In The New Eu Member States Despite Recent Global Financial Market Turbulence, But Attention Should Be Paid To Persistent Medium Term Challenges(C)1994-2007 M2 COMMUNICATIONS LTD

RDATE:27092007

Warsaw -- Growth remains high throughout the EU8+2, with the exception of Hungary and in the case of Latvia exhibits signs of overheating, according to the World Bank's latest EU8+2[*]Regular Economic Report. However, the report notes that the current turbulence following developments in the US housing and mortgage market and a sharp reappraisal of risk represent a test of the vulnerabilities of the EU8+2 countries. The "benign" international financial conditions faced by the EU8+2 for several recent quarters, and the prospect of continued robust global growth, suddenly have looked much less certain. Even the expectation of monetary tightening in the Eurozone and the US has shifted as the US cut its interest rates. While there has been a partial reversal of the initial movements of asset prices, bond spreads, and currency values, the episode is not over and there may be further worrisome developments both in...

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