The deepening crisis in the euro-zone reinforces our view that growth in Emerging Europe will slow by more than most expect over the next year. We expect the region’s economy as a whole to expand by just 1.8% in 2012, which encompasses a recession in Turkey. Growth should rebound in 2013, but at around 3.5% it will remain below that seen in other emerging market regions. Needless to say, against this backdrop, the recent inflation scare should prove short-lived and, with fiscal policy constrained in pretty much every country, interest rate cuts will come back on the agenda.