ANNUAL REPORT 2011 - Magyar Fejlesztési Bank Zrt.

❙ THE OPERATING ENVIRONMENT OF MFB HUNGARIAN DEVELOPMENT BANK PRIVATE LIMITED COMPANY IN 2011
n n n n
n n n n
*GDP GROWTH (2007=100%)
SOURCE: EUROSTaT
Q4: 0.7%) in the Eurozone with the period between October and
December showing contraction (-0.3%) for the first time after nine
quarters as compared to the previous three months.
The Eurozone member states continued to diverge in 2011.
The pronounced divergence in reflected by a comparison of 2011
and pre-crisis output levels showing that the performance of the
group of countries referred to as PIIGS countries (Portugal, Italy,
Ireland, Greece and Spain) and especially Greece and Ireland fell
way short of that in 2007, while Germany surpassed that level in
the second half of 2010. The fact that the Eurozone as a whole
managed to return to the level recorded in 2007 only in the second
quarter of 2011 demonstrates how slow and fragile recovery has
been in the region.
The divergence of member states and prolonged management
of debt related problems punctured gaping holes in the political
unity of the European Union and raised questions about continuing
the operation of certain levels of integration (e.g. monetary union)
in their current form.
The differing views of member states, lack of unity and
consensus have increasingly turned into barriers hindering
economic recovery.
In addition to the US economy being sick-listed, the reasons of
slower than expected US growth in the first half of 2011 include first
of all supply chains faltering in the wake of the earthquake in Japan,
recession fears triggered by the Eurozone sovereign debt crisis and
rising commodity (particularly oil) prices. At 2.2% (yoy) in the first
quarter, the rate of GDP growth decelerated modestly during the
remainder of the year (to 1.6% in Q2, 1.5% in Q3 and 1.6% in Q4),
as neither community nor household level spending showed true
recovery due to tight fiscal headroom, indebted governments and
retail spending curbed by persistently high unemployment. The
fundamental difference of opinion between the two political sides
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MFB ANNUAL REPORT 2011