Central and Eastern Europe Economic Scorecard

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The markets of Central and Eastern Europe offer attractive potential for internationally minded businesses. Each of the markets has something to offer, yet is characterised by different levels of development. We have created an economic scorecard for the region, which enables you to benchmark opportunities against your own specific development requirements. The CEE Scorecard is aimed at enabling you to make an initial assessment of the opportunity.

General IndexClear selection

Agregates Index

Access to Markets0%

Resources for Growth0%

Cost Competitiveness0%

Growth Sustainability0%

Business Environment0%

Download report (2.7Mb, PDF) Clear selection

Methodological Annex

Construction of indices

Index Description Valuation of
original measure
Source of
original data
Comments
Global MarketsShare of subindices: 50%
Access to Global Markets The index is based on countries membership in international organisations: EU, NAFTA, ASEAN, WTO. The membership in given organisations give the following values to the original measure: EU=10, NAFTA=8, US/EU Free Trade Agreement=6, Regional Free Trade Agreement=4, WTO membership=2. The higher the better PwC analysis
Trade Freedom The index is based on the stock of Foreign Direct Investment in the country as the percent of GDP in 2012 The higher the better UNCTAD data for FDI and IMF data for GDP
FDI Sock The index is based on the stock of Foreign Direct Investment in the country as the percent of GDP in 2012 The higher the better UNCTAD data for FDI and IMF data for GDP
Export Diversity The HHI (Herfindahl-Hirschman Index) of export concentration based on OECD data on Trade in Value Added. The OECD data on Trade in Value Added measure the estimated actual velue of exported goods in value added of desitination countries. The masure we use is a proxie for dependence od countries' exports on total demand in limited number of the largest trade partners. The lowe value the better OECD data on Trade in Value Added Standard trade data were used for: Croatia and Ukraine
Local MarketShare of subindices: 50%
Local market potential The index is based on the average GDP growth rate for the period between 2003 and 2012. It illustrates the long term growth potential of the local market. The higher the better IMF
Index Description Valuation of
original measure
Source of
original data
Comments
PeopleShare of subindices: 33%
Population growth The index based on total percentage growth of population between 2010 and 2030 according to UN forecast The higher growth rate the better UN demographic forecast
Old Age Dependecny 2030 The index based on the forecasted share of 65+ persons in total population in 2030 The lower share the better UN demographic forecast
PISA mathematics The index based on PISA 2009 results for mathematics. PISA is an international study run by the OECD every 3 years. It evaluates education systems worldwide by assessing 15-year-olds' competencies in the key subjects: reading, mathematics and science. The higher result the better OECD The value have been assumed based on other results for: South Africa and Ukraine
Total Students The index based on the share of students participating in tertiary education in total country population The higher share the better UNESCO institute for statistics The shares have been estimated based on other results/sources for: South Africa, Russia, Thailand, Italy and Germany
Secondary Enrollment The index based on the share of students participating in secondary education in total country population The higher share the better UNESCO institute for statistics The shares have been estimated based on other results/sources for Brazil and Greece.
Infant Mortality The index based on the infant mortality rate data as published by United Nations Statistics Division (2011 data) The lower the better UN Statistics Division
CapitalShare of subindices: 33%
Saving rate The index is based on the share of savings in countries' GDP (2012 data) The higher share the better IMF
Investments The index is based on the share of investment in countries' GDP (2012 data) The higher share the better IMF
Stock Exchange The index is based on the relation of value of traded shares to countries' GDP (2010 data) The higher share the better CIA World Factbook for the value of traded shares and IMF for GDP The maximum value of the index has been given to the countries where the value of shares traded has been at least equal to the average of the Norther European countries
Lending Rate The index is based on the Commercial banks average lending rate (2012 data) The lower the better CIA World Factbook
Credit to GDP The index is based on the relation of the stock of domestic credit to countries' GDP. It is assumed that the average relation (around 100% of GDP) is the optimal one. To low value of domestic credit mean underdevelopment of financial markets. To high value is equivalent to overlevaraged economy. Hence the final measure is the distance to the 100% value (2010 data). The lower the better CIA World Factbook for the value of domestic credit and the IMF for GDP
KnowledgeShare of subindices: 33%
WEF - Competitiveness Index The index is based on the Global Competitiveness Index issued annually by the World Economic Forum. The index is based on wide set of data and ranges from 1 (the worst result) to 7 (the best result) (2012-2013 data). The higher the better World Economic Forum
Digital inclusion The index is based on the share of internet users in total population (2011 data) The higher the better International Telecommunication Union
R&D expenditures The index is based on the OECD/Eurostat data The higher the better OECD and Eurostat The value have been assumed based on other results for: Thailand and Ukraine
Technical Students The index based on the share of students of engineering and sciences in total country population The higher share the better UNESCO institute for statistics The shares have been estimated based on other results/sources for: South Africa, Russia, Thailand, Italy and Germany
Index Description Valuation of
original measure
Source of
original data
Comments
Cost of human capital The index is based on the relation of the costs of labour (measured by GDP per capita) to the value of the human capital. The value of the human capital is approximated by the value of the Resources for Growth index, subindex: People (see above) (2012 data for GDP per capita). The lower the better PwC analysis and IMF data
Index Description Valuation of
original measure
Source of
original data
Comments
Financial SustainabilityShare of subindices: 33%
Public Debt The index is based on the relation of Public Debt to countries' GDP (2012 data) The lower the better IMF
Net Foreign Debt The index is based on the relation of the Net International Investment Position of the country to its GDP (2012 data) The lower the better PwC calculations based on IMF data The value of index has been set to 10 for all countries with net investment position higher than "0" (net lenders to the world)
Loans to Deposits The index is based on the relation of outstanding loans to outstanding deposits in countries' commercial banking sector (2011 data) The lower the better IMF
Political SustainabilityShare of subindices: 33%
Political stability The index is based on the value of The Economist Political Instability Index (2009 data) The lower the better The Economist Intelligence Unit The index value has been increased by 50% for Southern European countries due to increase of the level of political and social unrest in 2009-13
Environmental SustainabilityShare of subindices: 33%
CO2 emissions The index is based on the number of kilograms of CO2 emmission per 1 USD of GDP measured at Purchasing Power Parity. Average of 2005-2009 data. The lower the better UN Statistics Division
Index Description Valuation of
original measure
Source of
original data
Comments
InstitutionsShare of subindices: 25%
Starting Business Index based on ease of starting business measures used by the World Bank in annual Doing Business ranking. The average of average deviations from the world mean of individual indicators is used. Theese are: number of procedures to start a business, time, cost, minimal capital requirements (2012 data). The lower value the better World Bank Doing Business Database
Getting Credit Index based on ease of getting credit measures used by the World Bank in annual Doing Business ranking. The average of average deviations from the world mean of individual indicators is used. Theese are: strength of legal right index, depth of credit information index, public registry coverage, private bureau coverage (2012 data). The higher the better World Bank Doing Business Database
Paying Taxes Index based on ease of paying taxes measures used by the World Bank in annual Doing Business ranking. The average of average deviations from the world mean of individual indicators is used. Theese are: number of payments per year, time spent on tax procedures, size of profir tax, labour tax contributions, other taxes, total tax rate (2012 data). The lower the better World Bank Doing Business Database
Enforcing Contracts Index based on the measures of contract enforcement used by the World Bank in annual Doing Business ranking. The average of average deviations from the world mean of individual indicators is used. Theese are: time to resolve disputes, costs of judical procedures, number of procedures (2012 data). The lower the better World Bank Doing Business Database
TaxationShare of subindices: 25%
Government Revenue The index based on the share of government revenues in GDP (2012 data) The lower share the better IMF
InfrastructureShare of subindices: 25%
WEF infrastructure measure World Economic Forum index for infrastructure development (2012-2013 data) The higher the better World Economic Forum
TransparencyShare of subindices: 25%
Corruption Transparency Internation Index of Corruption. The index assumes the lowest values for highly-corrupted countries and higher values for uncorrupted countries (2012 data). The higher the better Transparenacy International Data
Shadow Economy The share of the shadow economy in GDP estimate for 2012 (2007 values). The lower the better The Shadow Economy and Work in the Shadow: What Do We (Not) Know? IZA Discussion Paper DP 6423

 

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prof. Witold Orłowski
Chief Economic Advisor
PwC

Witold is former Chief Economist to thePresident of Poland. He continues his academic and scientific activities - within the Independent Center for Economic Studies (NOBE) and as a head of the Business School at Warsaw Polytechnic.

As part of his current advisory in the economy area, Prof. Orłowski is involved inter alia in development of PwC services based on economy analysis for clients from both private and public sector.

e-mail: witold.orlowski@pl.pwc.com

Contact

Mateusz Walewski
Senior Economist
PwC

Senior Economist in PwC since march 2011. He works for the clients from public and private sector on the project related to economic analysis and modelling. Earlier he worked for CASE (Center for Social and Economic Research). In years 2008-2011 he was a member of the Board of Strategic Advisors to the Prime Minister of Poland. He worked in a series of advisory and research projects implemented in Poland and numerous countries of Central Europe and Western Asia. He cooperated among others with the World Bank, UNDP, European Comission, GTZ, USAID and worked for the governments of Georgia, Armenia, Azerbaijan, Moldova and Yemen.

e-mail: mateusz.walewski@pl.pwc.com

Contact

Martin Oxley
Director
UK Trade & Investment Poland

An expert in the healthcare and life sciences sector, he has led a number of the leading blue chip and regional pharmaceutical companies in Poland and the broader Central and Eastern European region. Most recently he was CEO of the British Polish Chamber of Commerce. Under his leadership the Chamber grew to be one of the most prominent international business networking organisations in Poland receiving a number of awards  for excellence and partnership development.

e-mail: martin.oxley@fco.gov.uk

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Access to Markets Index describes the level of countries' access to global markets and the dynamics of their domestic markets.

Access to Markets Index is based on two indexes - Global Markets (50%) and Local Market (50%). Global Markets is based on Access to Global Markets, Trade Freedom, FDI Sock, Export Diversity. Learn more about Methodology

Resources for Growth Index presents assessment of the three main assets that can be transformed into value added: people, capital, and knowledge.

Resources for Growth Index is based on three indexes - People (33%), Capital (33%), Knowledge (33%). Learn more about Methodology

Cost Competitiveness Index presents the ratio between the cost and the quality of labour.

Cost Competitiveness Index is based on index Cost of human capital (100%). Learn more about Methodology

Growth Sustainability Index takes into account the 3 dimensions of GDP growth sustainability: financial, political and environmental.

Growth Sustainability Index is based on three indexes - Financial Sustainability (33%), Political Sustainability (33%), Environmental Sustainability (33%). Learn more about Methodology

Business Environment Index presents assessment of institutions, tax system, infrastructure and overall transparency of the economy.

Business Environment Index is based on four indexes - Institutions (25%), Taxation (25%), Infrastructure (25%), Transparency (25%). Learn more about Methodology
The weightings tool enables the selection of the relevant weightings for specific preferences, thus enabling you to find the optimal solution for your specific needs.
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