Recessions arrive in CEE, external deficits narrowing

The big picture from the Q4 GDP data this week was that, despite some divergence within the region, Central and Eastern Europe (CEE) as a whole had a relatively poor end to 2022. We expect CEE economies to struggle further this year and our growth forecasts are generally below consensus. That said, current account figures for December this week made for more positive reading and offer early signs that external positions have started to improve. One key risk, though, is that gas prices surge into next winter and put currencies under renewed pressure.