The divergence in growth trends across the region is becoming more marked. Countries running large current account deficits have begun to feel the pinch from a deterioration in global financing conditions. So far, the slowdown in the real economy has been most severe in Estonia and Latvia where domestic demand has slumped. Meanwhile, in the financial markets, Turkish assets have been hit by a fresh bout of political uncertainty. Elsewhere, countries with smaller external deficits such as Poland and the Czech Republic, have escaped relatively unscathed, while overheating is now the predominant concern in Russia.