* CEE Business Climate rises to 16 in Jan from 10 in Oct
* Both current situation and outlook brighten
* Russia, Poland, financials drive overall improvement
* Thomson Reuters & OeKB Business Climate index released
By Boris Groendahl
VIENNA, Feb 9 (Reuters) - Business sentiment in emerging
Europe brightened further this winter as foreign direct
investors took a more upbeat assessment of both the outlook and
the current business situation, a survey showed on Tuesday.
The Thomson Reuters & OeKB Central and Eastern European
Business Climate index <REUTERSOEKB> rose strongly in the major
economies of Poland, Czech Republic and Russia, more than
offsetting a slight worsening in some Balkan countries.
The quarterly index rose to 16 in January from 10 in
October, sectorally driven by a marked improvement in the
climate reported in the banking and insurance industries.
"As could be expected, those central and eastern European
countries which will be able to manage the economic crisis on
their own and will have slight growth in 2010 showed the best
business climate," said Austrian export financing bank OeKB,
which compiles the survey. []
"Remarkably, the assessment for Russia is also clearly more
optimistic even though the country was hit much harder by the
financial and economic crisis," it said.
"Obviously the direct investors now assume that Russia's
economy has hit the bottom and will enter a -- possibly only
preliminary -- recovery period," it said.
The index's indicator for companies' assessment of their
current business situation rose to 3, the first positive value
in a year. Business expectations rose to 29 from 23, while the
view of the economic outlook expanded slightly, to 19 from 18.
"Foreign direct investors see brighter prospects than they
did in October, even though this upwards trend has lost some of
the momentum it had in the previous surveys," it 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 its exports collapsed and bank
lending froze in the global financial crisis.
The International Monetary Fund expects most countries to
return to growth again this year, but the recovery could be slow
and protracted as western stimulus measures phase out, banks
keep lending tight and unemployment rises.
Manufacturing sentiment leapt ahead in January for the Czech
Republic and Hungary -- the region's two economies most linked
to the euro zone -- but it slowed in Poland because of a
deceleration in new orders and slippage in employment.
The region 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.
The index showed that optimism was dented in the Balkan
countries of Croatia, Serbia and Bulgaria, where the index
declined but stayed positive, while it rose for Romania, the
country supported by 20 billion euro aid package led by the IMF.
Hungary and Ukraine remained the only countries where the
business climate index was still negative.
While the business climate for banks and insurers rose
markedly, it remained negative for the construction sector and
relatively subdued for real estate.
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.
(Additional reporting by Michael Winfrey in Prague; Editing by
Ruth Pitchford)
