Manufacturing PMIs (May)

The rise in the manufacturing PMIs to fresh record highs for Czechia and Poland in May was driven by output and new orders, but supply issues have continued to push up input and output prices. In contrast, Turkey’s PMI fell to a 12-month low, but should rise this month now that the lockdown has been lifted.
Liam Peach Emerging Markets Economist
Continue reading

More from Emerging Europe

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

More from Liam Peach

Emerging Europe Economics Update

BoI withdraws support, but no sign of tightening

Israel’s strong economic recovery prompted the central bank to phase out one of its emergency support programmes at today’s meeting and Governor Yaron’s comments suggest that the next step towards policy normalisation may involve the end of the bond purchase programme later this year. That said, interest rate hikes remain a distant prospect while inflation remains low.

5 July 2021

Emerging Europe Economics Update

Russian ruble may hold onto some of this year’s gains

The Russian ruble appreciated to a one-year high against the dollar recently but we think the rally will fade as oil prices fall back and US Treasury yields rise further. That said, the central bank’s determination to rein in inflation should keep Russian bond yields high and provide the ruble with more protection in this global environment. We now expect the ruble to end next year at 76/$ (previously 80/$).

In view of wider interest, we are sending this Emerging Europe Economics Update to clients of the FX Markets service as well.

2 July 2021

Emerging Europe Economics Update

Russia: a strong recovery in Q2, but risks ahead

Another strong batch of activity data for May suggest that Russia’s economy may have returned to just shy of its pre-pandemic level in Q2. The foundations are in place for the recovery to continue in Q3, but the latest virus wave and the possibility of a further tightening of containment measures pose a key threat.

1 July 2021
↑ Back to top