A strong start to the year

The latest data suggest that the economies of Emerging Europe got off to a good start to the year. Our regional aggregates of the manufacturing PMIs and the European Commission’s Economic Sentiment Indicators both rose to multi-year highs last month. Meanwhile, the hard activity figures for January available so far (for Russia and Poland) also point to faster economic growth – markedly so in the case of Poland. We suspect that the strength of the recent data may not be sustained. Some of the January activity figures were flattered by working-day effects. And, more generally, surveys in the region over the past year or so have pointed to more rapid economic growth than has actually been recorded. But, overall, the data support our view that regional growth will be stronger this year than it was in 2015-16