The fall in inflation across much of Emerging Europe last month was surprisingly sharp, which in part was due to lower oil prices but also (and more unexpectedly) a dip in food inflation. One consequence is that the Turkish central bank is likely to cut interest rates as soon as next month and policymakers in parts of Central Europe are likely to delay or postpone tightening. That said, strengthening core inflation in Central Europe means that we still expect rate hikes in 2019. Indeed, earlier this month, Hungary’s central bank, usually the most dovish in the region, provided its clearest steer yet that tightening is on the horizon.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to gain:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services