The raft of preliminary first quarter GDP data showed that, in contrast to most of the emerging world, growth in Central Europe strengthened. This came on the back of easing fiscal austerity, looser monetary conditions and, most noticeably, the windfall from lower oil prices which supported consumer spending. And these figures, as well as stronger inflation data, should ease lingering concerns that the region might get dragged into a lengthy bout of deflation. Elsewhere the news hasn’t been so good. Russian GDP fell sharply in Q1 on the back of the fall in oil prices and last year’s ruble crisis – the best that can be said is that the downturn wasn’t as severe as we had anticipated. And growth in Turkey seems to have slowed too, in the process undermining support for the AK Party ahead of next month’s parliamentary election.
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