Softer growth across much of Central and Eastern Europe in Q2 is likely to be attributed tospillovers from the crisis in Ukraine but, while this may have weighed on business confidence in some countries, we suspect the bigger driver of Q2’s slowdown was renewed weakness in the euro-zone and, in particular, Germany. We don’t expect the recovery in Central and Eastern Europe to go into reverse over the coming months and quarters but growth is likely to remain slower than the rates seen at the start of this year.
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