The outlook for Emerging Europe remains bleak. The economies of the ‘Super Deficit’ countries (Ukraine, Hungary, Turkey, the Baltics and the Balkans) look set to contract next year as the global financing environment deteriorates further. The IMF has bailed out Hungary and Ukraine but further deals are likely, starting with Latvia and Turkey. Meanwhile, Poland, Slovakia and the Czech Republic will all be hit by the slump in the euro-zone. For now, we expect all three to avoid outright falls in GDP, but much depends on how deep the recession in the single currency area becomes. Finally, Russia is facing a perfect storm of falling commodity prices, weaker external demand, tighter credit conditions and slower real incomes growth which could push growth down to 3% or below next year. In short, a dire outlook for the region with no meaningful recovery likely until 2011.