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CEE: interest rate squeeze likely to reverse soon

There’s a lot of uncertainty about how much impact monetary tightening has had in the global economy so far, but in Central and Eastern Europe (CEE) the hit to households has already been significant and we estimate that almost all of the impact from higher interest rates will have passed through by year-end. This drag from high rates will soon reverse now that central bank easing cycles are taking shape. Alongside a boost to households’ incomes from falling inflation, this should support a rebound in GDP in 2024.

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