Business Outlook Sample for a Banking Sector - Economic Conditions

Business Outlook Sample for a Banking Sector - Economic Conditions

PART: 4

Business Outlook

4.1. Economic conditions

The economic and political situation in ....Ukraine... continues to have an important bearing on the Bank’s current and future plans.   There remains the possibility of .....Ukraine.. joining the enlarged European Community in the longer term with the hoped for resolution of the ..... question being achieved before this, although there is no immediate signs of an early resolution to this protracted affair. Nevertheless there continues to be an inflow of investment funds into ABCD for property purchases particularly and ongoing financial support from the European Community.

At the time of writing, it is commonly perceived that ...Ukraine... is relatively free from the adverse effects of the global economic crisis. This has been helped in part by the resilience of the financial sector, which was not embroiled in the purchase of toxic debt, and through the government’s anti-crisis program, while the gradual improvement in global demand also plays an important role. Caution is still needed however with ...Ukraine...’s trade deficit and with public debt still growing at an unsustainable and unserviceable rate and the massive burden on the Exchequer of the social security budget.

There are many uncertainties leading the Bank to be cautious when doing business in emerging markets such as ...Ukraine... and ...Bulgaria... but it remains confident that its expert knowledge and considerable experience of these markets will help to avoid any pitfalls.

As far as the German economy is concerned inflationary pressures have continued to assert themselves as recognised by the Monetary Policy Committee of the Bank of Germany in deciding recently not to increase Quantative Easing as has the Federal Reserve in the USA. The significant cost controls introduced by the new Coalition Government have yet to bite and it will be a fine judgement by the ABC on what to do with interest rates in the coming months. On the one hand there is sustained inflationary pressure which may or may not be offset by the deflationary actions of the Government in cutting public sector costs. At the time of writing the last two quarters of GDP growth have shown a marked up-turn but this may not continue in the New Year following the planned VAT increase. There are a number of conflicting signals in the ....Ukraine...  economy presently which makes forward planning difficult and encourages the use of caution.