* CEE business climate index 21 in April versus 16 in Jan
* Rate of improvement slows down from H2 2009
* Russia, Poland, real estate and transport drive rise
* Banks, insurers more cautious
By Boris Groendahl
VIENNA, May 11 (Reuters) - Foreign direct investors in
emerging Europe became more cautious in their outlook for the
region, and the upwards trend in business morale slowed down for
the second quarter, a survey showed on Tuesday.
The Thomson Reuters & OeKB Central and Eastern European
Business Climate index <REUTERSOEKB> rose in Russia, Poland and
some Balkan countries, but the rate of improvement slowed down
markedly from last year's turnaround. []
The quarterly index rose to 21 in April from 16 in January,
sectorally driven by a marked improvement of sentiment among
real estate investors and transport companies, while it edged
down among banks and insurers.
Panelists were "significantly more happy with their current
business situation than they were in January", said Austrian
export financing bank OeKB, which compiled the survey from
replies gathered between April 6 and 26.
"But the new spirit of optimism that emerged among foreign
investors in the second half of 2009 didn't fully hold in 2010,"
it said. "The investors see the future optimistically, but show
overall more caution."
The index's indicator for companies' assessment of their
current business situation rose to 10 from 3 in January, while
business expectations expanded to 33 from 29. The view of the
broader economic outlook improved most, to 31 from 19.
"On a country level, the differences are significant. While
especially in Russia, the economy will step up a gear, Croatia
is still mired in financial and economic crisis, which hit the
country belatedly," OeKB said.
BUMPY ROAD TO TURNAROUND
Eastern European countries -- with the notable exception of
Poland -- went into a sudden and sharp recession last year as
demand from western Europe for their exports collapsed and bank
lending froze in the global financial crisis.
The International Monetary Fund in April raised its forecast
for east Europe's growth this year, but cut its 2011 outlook,
noting that recovery in the region would be the slowest among
the world's emerging economies.
East Europe is struggling to contain rising unemployment and
many analysts forecast a slowdown that will follow the end of
euro zone stimulus programmes like Germany's car-scrapping
scheme and an end to inventory restocking.
While the business mood in Hungary turned positive, Ukraine
was the only country where it remained negative and was even
worse than three months earlier.
NOTE - Distributed exclusively on the Reuters System, the
Thomson Reuters & OeKB Central European Business Climate Index
is based on quarterly surveys of 400 international companies
with regional headquarters in Austria, which manage 1,400
affiliate companies in 19 countries in central and eastern
Europe.
(Editing by Stephen Nisbet)
