Central & Eastern Europe GDP (Q4 2019)

The weak batch of Q4 GDP data for Central & Eastern Europe show that the downturn in Germany took a bigger toll on growth across the region. Prolonged weakness in the euro-zone and softer domestic demand mean that growth will slow further in 2020, but loose policy should prevent a sharp slowdown.
Liam Peach Emerging Markets Economist
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Emerging Europe Data Response

Poland Activity Data (Dec.)

The latest activity data in Poland show that industry expanded strongly in Q4 but that the shine came off the retail sector amid falling consumer sentiment and surging inflation. We think that GDP expanded by around 6.8% y/y (1.1% q/q) in Q4 which would leave Poland as the best performing economy in the region, but that the recovery will slow a touch at the start of this year.

24 January 2022

Emerging Europe Economics Weekly

Ukrainian markets feel the heat, oil nearing $90pb

Ukraine's financial markets remained under pressure this week as investors appear to have priced in a more serious outcome regarding Russia-Ukraine tensions. A positive reaction to today's talks between the US and Russia has brought some relief but, even if a renewed conflict doesn't materialise, local markets are set to face a difficult few months. Meanwhile, oil prices closed in on $90pb this week and we've revised up our year-end Brent crude forecast to $70pb (from $60pb). This will help support Russia's budget and current account surpluses, but will add 0.2-0.3%-pts to inflation elsewhere in the region and cause current account balances to worsen.

21 January 2022

Emerging Europe Economic Outlook

Mounting headwinds to take the shine off the recovery

We expect regional GDP growth to come in below expectations this year as high inflation erodes households’ real incomes and policy becomes more restrictive. Despite this view on the growth outlook, we think that persistent capacity constraints will mean that inflation ultimately settles at a higher level than is currently appreciated. This feeds into our relatively hawkish interest rate forecasts, particularly in Russia, Poland and Czechia.

20 January 2022

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Emerging Europe Data Response

Israel Consumer Prices (May)

The rise in inflation in Israel to 1.5% y/y in May was partly driven by food and energy, but there are some signs that underlying price pressures have increased. We think that inflation will rise further this year, but we maintain our view that this will be temporary and that interest rates will stay on hold.

15 June 2021

Emerging Europe Economics Update

Russia: consumer spending recovery has further to run

Russian household spending looks set to rebound strongly this year as “excess” savings are drawn down, credit continues to expand, government support boosts incomes, and the labour market recovers. This will keep inflation elevated for a while. But some of these factors are likely to fade next year which should cause spending growth to slow and help to bring inflation back to target.

15 June 2021

Emerging Europe Economics Weekly

Ruble gains, Hungary policy rift, stronger CEE currencies

The Russian ruble appreciated to its strongest level against the dollar since last July this week and the balance of forces now increasingly favours further gains, but a lot depends on geopolitics and all eyes will be on the outcome of the Biden-Putin summit next week. Meanwhile, the difference in opinions between Hungary’s central bank and the government about the outlook for policy further suggests that the central bank is taking the inflation fight more seriously and that the tightening cycle will start this month. Finally, we revised up our forecasts for the koruna, zloty and forint this week.

11 June 2021
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