Emerging Europe

Emerging Europe Data Response

Emerging Europe Data Response

Manufacturing PMIs (July)

The PMIs for July suggest that supply chain disruptions weighed on output in Czechia and Poland and continued to put upward pressure on prices. Meanwhile, the releases suggest that manufacturing demand softened in Russia but strengthened in Turkey. The recent rise in new virus cases in the latter is a concern.

2 August 2021

Emerging Europe Data Response

Czech GDP (Q2 2021)

The disappointing 0.6% q/q expansion of Czech GDP in Q2 suggests that industry may have fared worse than expected as input shortages took a greater toll on output. With virus restrictions easing further this month and vaccine coverage high, we expect the recovery to strengthen in the second half of this year.

30 July 2021

Emerging Europe Data Response

Economic Sentiment Indicators (July)

The EC’s Economic Sentiment Indicators showed a surprising fall in regional sentiment in July, but we suspect that this was a blip rather than the start of a trend. We still expect growth to be strong in Q3, although evidence of growing price pressures in the survey suggests inflation pressures will remain high.

29 July 2021
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Emerging Europe Data Response

Russia Activity Data (Jun.)

Russian activity data for June showed that the economy expanded at a solid pace in Q2, with overall GDP probably returning to just shy of its pre-pandemic level. While the re-opening boost will fade in Q3, we think that the economy will continue to grow at a strong pace.

Emerging Europe Data Response

Poland Activity Data (Jun.)

Polish industrial production and retail sales figures for June suggest that the rebound in economic activity softened a touch at the end of Q2, but GDP still looks to have expanded by 2.0% q/q in Q2. We think the recovery will maintain a solid pace in Q3 as activity in consumer-facing services sectors rebounds.

Emerging Europe Data Response

Israel Consumer Prices (Jun.)

The rise in headline inflation in Israel to a near 8-year high of 1.7% y/y in June was largely a result of base effects that pushed up food inflation. The muted 0.1% m/m rise in prices suggests that underlying inflation pressures generally remain weak. The risk of a prolonged period of high inflation is low in Israel and we don’t think the central bank will shift towards interest rate hikes for some time.

Emerging Europe Data Response

Turkey Industrial Production & Retail Sales (May)

Turkey’s activity figures for May, the month of a three-week national lockdown, showed that the industrial sector came through unscathed but that retail sales were hit hard. More timely evidence suggests that activity has rebounded quickly and, combined with the rise in inflation to a two-year high in June, means that the central bank will almost certainly leave interest rates unchanged tomorrow.

Emerging Europe Data Response

Russia Consumer Prices (Jun.)

The further rise in Russian inflation to a stronger-than-expected 6.5% y/y in June means the central bank (CBR) is likely to up the pace of tightening when it meets in a couple of weeks. A 75bp hike (to 6.25%) seems most likely, but the probability of an even larger 100bp hike has risen.

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