As I mentioned in my last blog posting, the credit crunch had not had such a dramatic effect in Poland and some other Central European markets. However now there has been a reduction in market confidence in Poaland due to negative comments in the media, not due to a reduction in bank lending.
Polish banks are still willing and able to lend money to companies and individuals for property and commercial purposes, however people are not borrowing, due to what they read in the newspapers.
The effect has been that the Polish property market has almost stopped and many developers and builders now have unsold property on their books.
In both Poland and the Czech Republic the forecasts for the growth in GDP have reduced dramatically from around 4 to 5% to 1 to 2%. These forecasts are, of course, far better than forecasts for the economies of Western Europe.
In addition the drop in the value of Sterling means that UK exports have not been so competitive for many years. As a result, Central Europe currently presents great opportunities for UK exporters. I hope they take up the challenge!