The risk of a large shortfall in COVID-19 vaccine deliveries to the EU threatens to delay the recovery that we had expected in Emerging Europe during the first half of this year. While the central bank of Hungary kept its main policy rates on hold this week, we think its decision to step up its asset purchase programme will be followed with a cut to short-term interest rates in the coming months. Finally, the Turkish central bank’s Inflation Report provided a (rare) realistic assessment of the outlook and offers further evidence that the shift to orthodoxy will stick.
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