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CEE: inflation a growing risk as economies re-open

Price pressures in Central Europe are building from a broad range of sources and, while most of these are likely to be temporary, the issue is that countries were experiencing stubbornly high inflation before these pressures emerged. With output gaps set to close more quickly than in other parts of the emerging world by 2023, we think that the risks over the coming years are skewed to a prolonged period of much higher inflation and, subsequently, more aggressive monetary tightening.

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