Deepest contraction since the collapse of communism

Emerging Europe will experience its largest decline in real GDP this year since the collapse of the Soviet Union. The aggressive policy response across Central Europe and the ability of the authorities there to bring the virus under control mean that activity is likely to bounce back more strongly than in Russia and Turkey, where the policy response has been much slower. Banking sectors across the region are generally better placed to weather an economic downturn than they were in 2008/09, but the key exception is Turkey where large vulnerabilities in the banking system may crystallise.