* Thomson Reuters OeKB CEE Business Climate index up 2 pts
* Rises to 23 in July from 21 in April; momentum slowing
* Ukraine, Russia improve most; Romania, Bulgaria weaken
By Boris Groendahl
VIENNA, Aug 10 (Reuters) - Business morale in emerging
Europe improved slightly in the last three months, but the
momentum of the recovery is waning, according to a Thomson
Reuters survey of foreign direct investors in the region.
The Thomson Reuters & OeKB Central and Eastern European
Business Climate index <REUTERSOEKB> rose 2 points to 23 in
July, losing steam for the third survey running as morale
worsened in Romania, Bulgaria and Croatia.
"Overall, the latest results ... indicate a stable
macroeconomic development and a solid business performance in
the coming months," said Austrian export financing bank OeKB,
which compiled the survey from July 1-14.
"However, the direct investors don't expect a strong upward
dynamic in the region for the time being," OeKB said.
Eastern Europe's star performer Poland -- the only European
Union country that grew last year -- stayed at the top of the
country ranking, while Ukraine's new government appears to have
reinstated confidence in the former Soviet Republic's economy.
The business climate in Ukraine turned positive for the
first time since 2008, rising by 21 points since the last
survey, which was done in April shortly after an election that
ultimately ended months of political paralysis.
Russia, which has returned to growth after its worst
recession in 15 years, recorded the second best improvement in
business morale, which went up 10 points.
In Romania, new austerity measures are expected to push the
country into another economic contraction this year and
investors' assessment of the business climate dropped for the
first time in a year.
Bulgaria and Croatia were the other two countries where the
business climate worsened. Morale in Hungary remained stable but
is still among the worst in the region after Prime Minister
Viktor Orban's election victory in June.
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Detailed results of the TR OeKB index: []
For graphic showing business climate index
http://r.reuters.com/bys93n
Business climate index details (PDF)
http://r.reuters.com/wus93n
Full data set on <REUTERSOEKB>
For Reuters Insider show http://link.reuters.com/mav93n
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EASTERN RECOVERY
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.
While most countries are expected to grow this year, the
European Bank for Reconstruction and Development last month cut
its forecasts, warning of greater uncertainty due to fiscal
tightening measures across the euro zone. []
East Europe is also struggling to contain rising
unemployment, still lacklustre bank lending, and domestic
austerity measures in some countries, and many analysts forecast
a slowdown in the second half of the year.
OeKB said in its survey that the sectors looking most
optimistically into the future were energy and utility firms,
while morale among property investors was worsening again and
that among builders remained subdued.
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.
(Reporting by Boris Groendahl; Editing by Ruth Pitchford)
