The macroeconomic impact of the landslide Tisza victory in Hungary is most likely to materialise over the medium term. More immediately, expectations for improved credibility policy and renewed access to EU funds have driven a rally in local markets and we now expect a stronger forint and lower government bond yields this year. Elsewhere, the US-Iran ceasefire came just in time for Turkey’s economy, which was facing growing balance of payments strains from high energy prices. And this should give the central bank room to refrain from tightening monetary policy further at its meeting next week.
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