CFA Society Forecasting Dinner 2014 Survey

Conducted in: 2014

The survey was carried out to mark the 12th annual CFA Society Forecasting Dinner 2014, which is organised by the CFA Society Czech Republic, an organisation that groups together chartered financial analysts. Forecasting this year’s economic trends is the subject of the annual meeting of leading domestic and foreign economists, held under the auspices of Miroslav Singer, governor of the Czech National Bank.
An online survey was conducted for the CFA Society Czech Republic between January 9 and 24, 2014, by Donath Business & Media, in co-operation with Herzmann advisory. Its aim was to map the opinions of economic and financial professionals on current topics concerning the Czech economy and expectations linked to the forming of the coalition government.

The following groups of professionals were invited to participate in the survey:

• Members of the CFA Society Czech Republic and CFA Programme candidates;
• Leading figures in the Czech corporate and financial sector (VIP);
• Readers of The Fleet Sheet's Final Word electronic bulletin;The survey was carried out to mark the 12th annual CFA Society Forecasting Dinner 2014, which is organised by the CFA Society Czech Republic, an organisation that groups together chartered financial analysts. Forecasting this year’s economic trends is the subject of the annual meeting of leading domestic and foreign economists, held under the auspices of Miroslav Singer, governor of the Czech National Bank.
  An online survey was conducted for the CFA Society Czech Republic between January 9 and 24, 2014, by Donath Business
  
  

  The following groups of professionals were invited to participate in the survey:

  • Members of the CFA Society Czech Republic and CFA Programme candidates;
  • Leading figures in the Czech corporate and financial sector (VIP);
  • Readers of The Fleet Sheet'
  • Readers of the Ekonom.cz server.

  The questions concerned:

  • Economic policy of the new governing coalition of ČSSD, ANO and KDU-ČSL;
  • Economic trends in the Czech Republic;
  • Banking union and the adoption of the Euro.
    

  A total of 2,044 respondents participated in the survey. An invitation to participate in the survey was mailed to 8,031 addressees, of which 1,624 replied, i.e. 20.2% of those addressed. The total includes 420 readers of the ekonom.cz news portal who participated in the survey spontaneously.

  Main findings
  

  Government should win vote of confidence, but will probably not last  

  Most respondents (60.5%) would give the coalition government of ČSSD, ANO and KDU-ČSL a confidence vote. This position does not differ across the groups queried. A comparable quantity (59.4%) of survey participants believe that the government will not last its entire electoral term. 
  
  Czech economy is expected to grow in 2014

  The Czech economy should grow this year, according to 81.1% of representatives of the professional public who participated in the survey. Respondents from the financial sector (90.8%) expect an increase in GDP, and just under half of them (42%) think that GDP will rise by more than 1%. Three quarters of respondents (73.5%) think that this year’s inflation will be between 1% and 3%.  
  
  Government will increase spending and taxes; it will hurt the economy

  A majority of 79.1% of respondents expect the current coalition government to increase spending. A total of 46.5% think that the 3% budget deficit limit will be met but that taxes will be increased. Another 32.6% expect that spending will be financed by an increase in government debt. 

  Concerning taxation, respondents most frequently expect that in the next year the government will make personal income tax more progressive (69.7%) and will introduce a sector tax (60.6%). Expectations for corporate income tax are split, with 47.9% of respondents expecting the government to increase it. The prevalent opinion is that the increase could reach as high as 2%. No change to the tax rate is expected by 44.1% of survey participants. The majority view (65.9%) is that the coalition government will reduce VAT on some select items.

  Most respondents (57.4%) believe that the tax changes expected by the coalition government will damage the economy. This opinion is most frequently held by people in the financial sector (67.9%).
  
  The government will not be able to introduce effective anti-corruption measures, but it is expected to improve transport infrastructure

  Most participants in the survey (70%) do not expect the government to introduce effective anti-corruption measures effective measures to reduce corruption. Respondents are even more pessimistic in their view of claims by the coalition parties that the individual ministries will not serve the special interests of the parties’ or movements that control them. A full 83.6% of respondents think that the government will not manage to prevent this.

  A significant majority of respondents (80%) agrees with the government’s intention to increase investment in the development and maintenance of transport infrastructure to 2% of GDP. The majority (68.8%) also agree with the government’s plan to achieve food self-sufficiency in basic commodities that can be produced in the Czech Republic.
  
  We don’t want banking union, and the Euro can wait

  A negative opinion on the banking union was prevalent among survey participants (52.1%), and the tendency toward categorical rejection was very strong (27.3%). Respondents from financial circles and the rest of the private sector more frequently had a negative attitude. Tolerance of banking union rises with the respondents’ age.
  Most respondents (66.1%) think that the Czech Republic should adopt the Euro, but 45.1% would defer this step until the direction of the Eurozone becomes clear. Support for this opinion is most frequent in the case of respondents from educational, government and public institutions. As age rises, there is a greater willingness to give up the Czech currency.

Kontakt: Tomáš Jelínek