Encouraging CEE inflation data, Turkey’s gold tariff

The July inflation data out of Central and Eastern Europe (CEE) this week suggests that our forecasts for interest rate cuts to arrive across the region over the rest of this year, and in early 2024, remain on track. Meanwhile, Turkey’s decision to impose an additional charge on some gold imports highlights the severity of the challenge that policymakers are facing in trying to fix the economy. If policymakers are serious about restoring macroeconomic stability though, the big picture is that further monetary tightening and a lengthy period of high interest rates can’t be avoided.