Economic Sentiment Indicators (Nov.)

The EC’s Economic Sentiment Indicators for November showed a broad-based rise in industrial sentiment, but services sentiment softened further. With restrictions on activity being re-imposed amid surging virus cases and concern over the new ‘Omicron’ COVID-19 variant, the regional recovery is likely to slow in the coming months.
James Reilly Assistant 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 Economics Update

Cyclical pressures set to keep CEE inflation elevated

Inflation across Central and Eastern Europe (CEE) has continued to surge and now sits at its highest level in around 20 years. This can be partly attributed to global factors, such as rising energy prices and supply chain disruptions, which are eventually likely to ease. However, underlying cyclical price pressures are building and we think that these will keep headline inflation elevated over the course of 2022-23.

24 November 2021

Emerging Europe Data Response

Central & Eastern Europe GDP (Q3 2021)

The Q3 GDP data for Central and Eastern Europe (CEE) generally undershot expectations and suggest that economies entered Q4 with a clear loss of momentum. With supply disruptions set to persist and some COVID-19 restrictions likely to be reintroduced, growth is likely to slow further in the near term.

16 November 2021

Emerging Europe Economics Update

Long road ahead for CEE auto producers

Auto producers in Central and Eastern Europe (CEE) have experienced intermittent factory closures in the second half of this year and things may get worse before they get better. Motor vehicles production will remain stop-start until shortages of semiconductors and other key inputs are resolved, which we don’t expect to happen anytime soon. We think that the fall in CEE motor vehicles production relative to its pre-pandemic trend will knock 0.6% or so off GDP in 2021, rising to 0.8% in 2022.

5 November 2021
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