Assessing the fallout from the tourist slump

Borders are slowly re-opening across Emerging Europe, but international tourists are unlikely to return to the region in significant numbers for the key summer season. Romania and Russia are the least vulnerable and efforts to promote domestic tourism should soften the blow in Central Europe. But the loss of tourism will weigh on the recovery in Turkey and provide a significant hit to GDP in Croatia and the Baltic States.
Olivia Cross Research Assistant
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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

More from Olivia Cross

Latin America Economics Update

What Mexico’s current account means for the peso

We expect that Mexico’s current account deficit will narrow, and could even turn to a small surplus, over the rest of the year as a strong goods surplus outweighs weaker remittance inflows. That should help the currency to strengthen over the rest of the year – our end-2020 forecast is 21.5/$ (from 22.3/$ now).

13 August 2020

Africa Economics Update

Assessing the damage to tourism sectors in Africa

Tourism sectors across Africa, like much of the rest of the world, are at a standstill and any recovery is likely to be slow going. Even if travel restrictions are lifted international tourists are unlikely to return this year, and a big hit to incomes will also put domestic tourism on hold. Overall, we expect the direct hit to knock 2-4% from GDP across the region this year.

25 June 2020
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