International Investment Position of 
Poland and the Czech Republic 
Fakultät Wirtschaftswissenschaften 
Lehrstuhl für Wac...
Prof. DDrr.. TThhoommaass GGrriieess 
Agenda: 
•Stylized Facts 
•IIP of Czech 
Republic 
•IIP of Poland 
Agenda 
• Stylize...
Prof. DDrr.. TThhoommaass GGrriieess 
International Investment Position of Poland and Czech Republic 
Agenda: 
•Stylized F...
Prof. DDrr.. TThhoommaass GGrriieess 
International Investment Position of Poland and Czech Republic 
Inflation Rates of P...
Prof. DDrr.. TThhoommaass GGrriieess 
International Investment Position of Poland and Czech Republic 
Net International In...
Prof. DDrr.. TThhoommaass GGrriieess 
Agenda: 
•Stylized Facts 
•IIP of Czech 
Republic 
•IIP of Poland 
International Inv...
Prof. DDrr.. TThhoommaass GGrriieess 
Agenda: 
•Stylized Facts 
•IIP of Czech 
Republic 
•IIP of Poland 
International Inv...
Prof. DDrr.. TThhoommaass GGrriieess 
Agenda: 
•Stylized Facts 
•IIP of Czech 
Republic 
•IIP of Poland 
International Inv...
Prof. DDrr.. TThhoommaass GGrriieess 
Agenda: 
•Stylized Facts 
•IIP of Czech 
Republic 
•IIP of Poland 
International Inv...
Prof. DDrr.. TThhoommaass GGrriieess 
Agenda: 
•Stylized Facts 
•IIP of Czech 
Republic 
•IIP of Poland 
International Inv...
Prof. DDrr.. TThhoommaass GGrriieess 
International Investment Position of Poland 
Agenda: 
•Stylized Facts 
•IIP of Czech...
Prof. DDrr.. TThhoommaass GGrriieess 
International Investment Position of Poland 
Agenda: 
•Stylized Facts 
•IIP of Czech...
Prof. DDrr.. TThhoommaass GGrriieess 
International Investment Position of Poland 
Agenda: 
•Stylized Facts 
•IIP of Czech...
Prof. DDrr.. TThhoommaass GGrriieess 
International Investment Position of Poland 
Agenda: 
•Stylized Facts 
•IIP of Czech...
Prof. DDrr.. TThhoommaass GGrriieess 
International Investment Position of Poland 
Agenda: 
•Stylized Facts 
•IIP of Czech...
Prof. DDrr.. TThhoommaass GGrriieess 
International Investment Position of Poland 
Agenda: 
•Stylized Facts 
•IIP of Czech...
Prof. DDrr.. TThhoommaass GGrriieess 
International Investment Position of Poland 
Agenda: 
•Stylized Facts 
•IIP of Czech...
Prof. DDrr.. TThhoommaass GGrriieess 
International Investment Position of Poland 
Agenda: 
•Stylized Facts 
•IIP of Czech...
Prof. DDrr.. TThhoommaass GGrriieess 
International Investment Position of Poland 
Agenda: 
•Stylized Facts 
•IIP of Czech...
Prof. DDrr.. TThhoommaass GGrriieess 
Conclusion 
Agenda: 
•Stylized Facts 
•IIP of Czech 
Republic 
•IIP of Poland 
ü IIP...
Prof. DDrr.. TThhoommaass GGrriieess 
Agenda: 
•Stylized Facts 
•IIP of Czech 
Republic 
•IIP of Poland 
Thank you for you...
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International Investment Position of Czech republic and Poland

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International Investment Position of Czech republic and Poland

  1. 1. International Investment Position of Poland and the Czech Republic Fakultät Wirtschaftswissenschaften Lehrstuhl für Wachstums- und Konjunkturtheorie Prof. Dr. Thomas Gries Sherif Elkoumy and Johanna Reinkemeier Elkoumy/ Reinkemeier -Poland/25.02.2009 Czech Republic 1
  2. 2. Prof. DDrr.. TThhoommaass GGrriieess Agenda: •Stylized Facts •IIP of Czech Republic •IIP of Poland Agenda • Stylized Facts • International Investment Position of Czech Republic •Conclusion • International Investment Position of Poland • Conclusion 25.02.2009 Elkoumy/ Reinkemeier -Poland/Czech Republic 2
  3. 3. Prof. DDrr.. TThhoommaass GGrriieess International Investment Position of Poland and Czech Republic Agenda: •Stylized Facts •IIP of Czech Republic •IIP of Poland Czech Republic Poland Population 10 million 38 million GDP $175bn $420bn •Conclusion Average real GDP growth rate 2003-08 4.3% 4.4% Currency koruna zloty EU membership: Since 01/2004 25.02.2009 Elkoumy/ Reinkemeier -Poland/Czech Republic 3
  4. 4. Prof. DDrr.. TThhoommaass GGrriieess International Investment Position of Poland and Czech Republic Inflation Rates of Poland and the Czech Republic 40 30 20 10 0 1994 1996 1998 2000 2002 2004 2006 2008 Year Inflation rate (%) Czech Republic Poland Agenda: •Stylized Facts •IIP of Czech Republic •IIP of Poland •Conclusion ü high inflation rates of Poland in the 80s and 90s Ł revaluation with factor 1:10,000 in 1995 ü Afterwards stabilization thanks to strict monetary policy of the Polish central bank ü Czech koruna has been one of the most stable currencies in Central and Eastern Europe Ł Aims to adopt Euro in 2011 (Poland) and 2012 (Czech R.) 25.02.2009 Elkoumy/ Reinkemeier -Poland/Czech Republic 4
  5. 5. Prof. DDrr.. TThhoommaass GGrriieess International Investment Position of Poland and Czech Republic Net International Investment Positions of Poland and the Czech Republic 1993-2008 (stocks in millions of USD) Agenda: •Stylized Facts •IIP of Czech Republic •IIP of Poland •Conclusion Ł Czech Republic and Poland are both debtor nations 25.02.2009 Elkoumy/ Reinkemeier -Poland/Czech Republic 5
  6. 6. Prof. DDrr.. TThhoommaass GGrriieess Agenda: •Stylized Facts •IIP of Czech Republic •IIP of Poland International Investment Position of the Czech Republic International Investment Position of the Czech Republic 200000 180000 160000 140000 120000 100000 80000 60000 40000 IIP Total Assets: (Millions of USD) IIP Total Liabilities: (millions of Us$) •Conclusion 20000 0 1993 1995 1997 1999 2001 2003 2005 2007 Ł Domestic liabilities increase at a faster pace than domestic assets 25.02.2009 Elkoumy/ Reinkemeier -Poland/Czech Republic 6
  7. 7. Prof. DDrr.. TThhoommaass GGrriieess Agenda: •Stylized Facts •IIP of Czech Republic •IIP of Poland International Investment Position of the Czech Republic Structure of the investment position assets and liabilities: • IIP deficit of $68,600m in 2008 (37.8% of GDP) • Deficit mainly due to FDI into the Czech economy • High share of foreign portfolio investment assets in Czech Republic 100% •Conclusion 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Assets Liabilities Other Government Czech National Bank Commercial Banks Portfolio Investment Foreign Direct Investment 25.02.2009 Elkoumy/ Reinkemeier -Poland/Czech Republic 7
  8. 8. Prof. DDrr.. TThhoommaass GGrriieess Agenda: •Stylized Facts •IIP of Czech Republic •IIP of Poland International Investment Position of the Czech Republic Development of Direct Investment 120000 100000 80000 60000 40000 20000 0 Czech FDI Stocks Abroad: (millions of USD) FDI Stocks in Czech Republic (millions of USD) •Conclusion 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Development of Portfolio Investment 40000 35000 30000 25000 20000 15000 10000 5000 0 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Portfolio Investment Assets (millions of USD) Portfolio Investment Liab (millions of USD) 25.02.2009 Elkoumy/ Reinkemeier -Poland/Czech Republic 8
  9. 9. Prof. DDrr.. TThhoommaass GGrriieess Agenda: •Stylized Facts •IIP of Czech Republic •IIP of Poland International Investment Position of the Czech Republic Accumulation of Reserves • official reserve assets: $34,922m (12/2008) Stock of Foreign Reserves in the Czech Republic (millions of USD) 40000 35000 30000 25000 20000 15000 10000 •Conclusion 5000 0 Ł Czech Republic accumulates foreign reserves to maintain the koruna´s undervaluation (estimations: +15%) 25.02.2009 Elkoumy/ Reinkemeier -Poland/Czech Republic 9
  10. 10. Prof. DDrr.. TThhoommaass GGrriieess Agenda: •Stylized Facts •IIP of Czech Republic •IIP of Poland International Investment Position of the Czech Republic Balance of Payments 10000 8000 6000 4000 2000 0 -2000 -4000 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Current Account in millions of Us$ /flows Balance on Goods & Services in -6000 •Conclusion -8000 millions of Us$ Ł Current account deficits due to huge income deficits 25.02.2009 Elkoumy/ Reinkemeier -Poland/Czech Republic 10
  11. 11. Prof. DDrr.. TThhoommaass GGrriieess International Investment Position of Poland Agenda: •Stylized Facts •IIP of Czech Republic •IIP of Poland • IIP of Poland recorded an increse in deficit for the last 15 years • Net foreign acquisition of financial assets in Poland exceeds net Poland acquisitions of financial assets abroad •Conclusion 25.02.2009 Elkoumy/ Reinkemeier -Poland/Czech Republic 11
  12. 12. Prof. DDrr.. TThhoommaass GGrriieess International Investment Position of Poland Agenda: •Stylized Facts •IIP of Czech Republic •IIP of Poland • Net Position recorded net Liabilities of around 242 B.$ at yearend 2007, compared with 166 B.$ at yearend 2006 •The deficit represented 43.8% of GDP at yearend 2007 compared with 33% at yearend 2006. •Conclusion 25.02.2009 Elkoumy/ Reinkemeier -Poland/Czech Republic 12
  13. 13. Prof. DDrr.. TThhoommaass GGrriieess International Investment Position of Poland Agenda: •Stylized Facts •IIP of Czech Republic •IIP of Poland • Direct Investment ü DI Assets and Liabilities increased for the four consecutive years. ü High share of Direct Investment in reporting economy (liabilities) . about 31% of GDP •Conclusion 25.02.2009 Elkoumy/ Reinkemeier -Poland/Czech Republic 13
  14. 14. Prof. DDrr.. TThhoommaass GGrriieess International Investment Position of Poland Agenda: •Stylized Facts •IIP of Czech Republic •IIP of Poland • Direct Investment ü Net Position of Direct Investment recorded net Liabilities, an increase in deficit of about 156 B.$ at yearend 2007,compared with 111 B.$ at yearend 2006. ü Relative high interest rate in average 5% ü Increasing equity/shares capital and reinvested earnings . •Conclusion 25.02.2009 Elkoumy/ Reinkemeier -Poland/Czech Republic 14
  15. 15. Prof. DDrr.. TThhoommaass GGrriieess International Investment Position of Poland Agenda: •Stylized Facts •IIP of Czech Republic •IIP of Poland • Portfolio Investment ü The observable rise in Liabilities is due to rising acquisitions of domestic equity and debt securities and Purchases the bonds and notes issued by the Gov. ü Bonds and notes represented 70% of PI Liabilities. •Conclusion 25.02.2009 Elkoumy/ Reinkemeier -Poland/Czech Republic 15
  16. 16. Prof. DDrr.. TThhoommaass GGrriieess International Investment Position of Poland Agenda: •Stylized Facts •IIP of Czech Republic •IIP of Poland • Portfolio Investment (Net Position) ü recorded net liabilities, an increase in deficit about 83 B.$ at yearend 2007,compared with 70 B.$ at yearend 2006. ü The deficit represented 15% of GDP. •Conclusion 25.02.2009 Elkoumy/ Reinkemeier -Poland/Czech Republic 16
  17. 17. Prof. DDrr.. TThhoommaass GGrriieess International Investment Position of Poland Agenda: •Stylized Facts •IIP of Czech Republic •IIP of Poland • Financial Derivatives ü Net Liabilities, an increase in deficit of about 292 m.$ at yearend 2007, compared with 68 m.$ at yearend 2006. ü Derivatives Markets were established in the period 2003- 2004. an observable increase in lequidity of interest rate and FX derivatives traded on OTC. •Conclusion 25.02.2009 Elkoumy/ Reinkemeier -Poland/Czech Republic 17
  18. 18. Prof. DDrr.. TThhoommaass GGrriieess International Investment Position of Poland Agenda: •Stylized Facts •IIP of Czech Republic •IIP of Poland • Other Investment ü Net Liabilities of about 67 B.$ at yearend 2007, due to increasing Loans which represented 70% of OI liabilities and Trade credits. •Conclusion 25.02.2009 Elkoumy/ Reinkemeier -Poland/Czech Republic 18
  19. 19. Prof. DDrr.. TThhoommaass GGrriieess International Investment Position of Poland Agenda: •Stylized Facts •IIP of Czech Republic •IIP of Poland • Reserve Assets ü Net Assets 65 B.$ at yearend 2007 (Compare Czech Republic: 35 B. $), to meet the country´s BOP needs. ü Foreign exchange represented 83% of total Reserve Assets due to continously incresing in Export. •Conclusion 25.02.2009 Elkoumy/ Reinkemeier -Poland/Czech Republic 19
  20. 20. Prof. DDrr.. TThhoommaass GGrriieess Conclusion Agenda: •Stylized Facts •IIP of Czech Republic •IIP of Poland ü IIP deficit mainly due to FDI into the Czech economy and the Polish economy. ü High share of foreign portfolio investment assets in Czech Republic, conversely high share of foreign portfolio Investment liabilities in Poland. ü The deficit in IIP of Poland represented 43.8% of GDP, and 34.4% of GDP in the Czech R. •Conclusion 25.02.2009 Elkoumy/ Reinkemeier -Poland/Czech Republic 20
  21. 21. Prof. DDrr.. TThhoommaass GGrriieess Agenda: •Stylized Facts •IIP of Czech Republic •IIP of Poland Thank you for your attention! •Conclusion 25.02.2009 Elkoumy/ Reinkemeier -Poland/Czech Republic 21

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