Czech Republic: gradual shift to easing next year

The communications following today’s meeting suggest that Czech policymakers are trying to temper the market’s view that interest rates will be cut in the coming months. Nonetheless, the Bank’s projections have moved closer to our view that rate cuts will come on to the agenda in the second half of 2020.
Liam Peach Emerging Markets Economist
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Emerging Europe Data Response

Turkey GDP (Q3 2021)

Turkey’s economy put in another strong performance in Q3 but, as the effects of the recent currency crisis filter through, it is likely to suffer a contraction in Q4. The only crumb of comfort is that the downturn is likely to prove less severe than that which followed the 2018 crisis.   Drop-In: India – How much scarring will the pandemic leave? 10:00 ET/15:00 GMT, Wednesday 1st December https://event.on24.com/wcc/r/3535749/63CC51718846E8FF3D871827AC84AF1E?partnerref=report Drop-In: Why is Asia sitting out the global inflation surge? 09:00 GMT/17:00 HKT, Thursday 2nd December https://event.on24.com/wcc/r/3546145/A9D34EF592141BEFCAC819ADB40359D5?partnerref=report

30 November 2021

Emerging Europe Data Response

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.

29 November 2021

Emerging Europe Economics Weekly

Lira crisis, MNB hikes, Ukraine-IMF, Romanian politics

This week has been dominated by the collapse in the Turkish lira and all our research on the crisis can be found here. While Turkey’s problems have been driven by a ‘head-in-the-sand’ approach to inflation and falls in the lira, Hungary’s central bank tightened policy further this week amid signs that officials across Central Europe are taking the inflation fight more seriously and becoming less tolerant of currency weakness. Elsewhere, the early signs are that a new grand coalition in Romania does not have the appetite for much-needed austerity. Finally, the latest tranche of IMF funds provide a welcome boost for Ukraine’s economy.
Drop-In: Why is Asia sitting out the global inflation surge? 09:00 GMT/17:00 HKT, Thursday 2nd December https://event.on24.com/wcc/r/3546145/A9D34EF592141BEFCAC819ADB40359D5?partnerref=report

26 November 2021

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Emerging Europe Data Response

Israel Consumer Prices (May)

The rise in inflation in Israel to 1.5% y/y in May was partly driven by food and energy, but there are some signs that underlying price pressures have increased. We think that inflation will rise further this year, but we maintain our view that this will be temporary and that interest rates will stay on hold.

15 June 2021

Emerging Europe Economics Update

Russia: consumer spending recovery has further to run

Russian household spending looks set to rebound strongly this year as “excess” savings are drawn down, credit continues to expand, government support boosts incomes, and the labour market recovers. This will keep inflation elevated for a while. But some of these factors are likely to fade next year which should cause spending growth to slow and help to bring inflation back to target.

15 June 2021

Emerging Europe Economics Weekly

Ruble gains, Hungary policy rift, stronger CEE currencies

The Russian ruble appreciated to its strongest level against the dollar since last July this week and the balance of forces now increasingly favours further gains, but a lot depends on geopolitics and all eyes will be on the outcome of the Biden-Putin summit next week. Meanwhile, the difference in opinions between Hungary’s central bank and the government about the outlook for policy further suggests that the central bank is taking the inflation fight more seriously and that the tightening cycle will start this month. Finally, we revised up our forecasts for the koruna, zloty and forint this week.

11 June 2021
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