Making a good start to the year

Data released over the past month have provided further evidence that regional growth strengthened at the start to the year. Admittedly, the region’s largest economy, Russia, remains in recession. But the slump in output there is clearly easing. Indeed, the industrial sector returned to growth in February. Meanwhile, the latest economic surveys suggest growth across Central and South Eastern Europe has remained robust at 3-4% y/y. By our estimates, growth in the region as a whole may have picked up to around 0.8% y/y in Q1 from 0.3% y/y in Q4. That’s not great, but it would be the fastest regional growth rate since late 2014.