The spillover effects for economies in Emerging Europe from the protests in Iran this week will largely depend on how commodity prices move. From a political standpoint, the protests are another blow for Russia, while Israel may stand to benefit. Elsewhere, the latest activity data out of Central and Eastern Europe (CEE) this week suggest that the Czech economy remained one of the best performers in the region at the end of last year – a trend we expect to continue in 2026. And the spike in weekly inflation out of Russia so far this month suggests that the VAT hike has stalled the disinflation process.
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