The economies of Emerging Europe are running into external headwinds. The most obvious of these is the deepening sovereign debt crisis in the euro-zone, which, despite the fact that Greece looks to have averted a near-term disaster, is still far from over. But signs that German industry is slowing are a concern too. We are sticking to our view that growth is likely to slow in every economy in Emerging Europe over the second half of the year, with the possible exception of Russia, where pre-election spending should boost demand.
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