Hungary’s growing imbalances, Russian gas flows

Comments from Hungary's central bank this week suggest that policymakers are moving closer towards a joint tightening of monetary and fiscal policy to cool demand and narrow the twin deficits. Elsewhere, Russian industrial production and retail sales figures showed much smaller falls in March than had been expected, but we think large declines are likely in April and May. Finally, the risk of energy rationing surged this week after Gazprom halted gas supplies to Poland and Bulgaria. Poland looks in a relatively good position to deal with this but other countries, such as Bulgaria and Czechia, are not and any disruptions would cause deep(er) recessions this year.