Fitch: Financing tough in Eastern Europe

Fitch Ratings said in a special report that the global financial crisis has left countries in central and eastern Europe that have substantial current account deficits, maturing external payments and foreign-currency debt on private sector balance sheets with a challenging external financing outlook.

The reduced availability of global capital flows and risk appetite makes a correction of excessive current account deficits and a severe recession inevitable in most of these countries, Fitch said.

Countries with the largest imbalances, external repayment burdens and foreign-currency debt on balance sheets are the most vulnerable to external financing risks, the agency said. These include the Baltic and Balkan states and Hungary, Fitch said, while the Czech Republic and Poland are the least exposed.

The new report looks at external imbalances, composition and payment schedules on external debt and foreign-currency exposures facing the Czech Republic, Hungary, Poland, Estonia, Latvia, Lithuania, Bulgaria, Romania, Croatia, Macedonia and Serbia.

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