Israel’s virus resurgence, re-opening inflation in CEE

The experience of Israel in recent weeks serves as a reminder that vaccine campaigns across Emerging Europe still have some way to go and that we are likely to have to learn to live with COVID long term. Meanwhile, the breakdown of the June inflation figures released this week for Poland and Czechia showed that price pressures in services sectors have picked up strongly since the re-opening. This may give some more ammunition to the hawks at the Czech central bank but we don’t think it will change the assessment at Poland’s central bank that the rise in inflation this year will be transitory.