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Manufacturing PMIs (May)

Manufacturing PMIs for May showed that weaker external demand weighed on export orders in Emerging Europe, and that spillovers from the war in Ukraine hit output. There were some signs of improvement in suppliers’ delivery times and price pressures, but we still think that industrial production is likely to contract in the coming months.
Joseph Marlow Assistant Economist
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Emerging Europe Data Response

Russia Consumer Prices (Jul.)

Russia’s month-on-month deflation deepened in July as consumer prices fell by a larger-than-expected 0.4% m/m (in y/y terms, the headline rate eased to 15.1%). The disinflationary impact of the strong ruble is likely to fade but with consumer demand so weak we think the headline inflation rate will fall towards 12% y/y by year-end. We think this will prompt a further 100bp of rate cuts, to 7.00%, later this year. Emerging Europe Drop-In (11th Aug): We’re expecting downturns in Central and Eastern Europe, but how bad could it get? Join this 20-minute briefing on our Q3 Outlook report, including the latest on Turkey, Russia and whether Hungary’s forint has further to fall. Register now.

10 August 2022

Emerging Europe Economics Update

EU & the rule of law dispute: why do EU funds matter?

EU funds will provide a key boost to economies in Central and Eastern Europe in the coming years as the region navigates a challenging macro environment and slowing global growth. Disputes with the European Commission over the rule of law in Hungary and Poland look close to being resolved, but the risk of funds being halted indefinitely remains high and would weigh heavily on growth in both countries. Emerging Europe Drop-In (11th Aug): We’re expecting downturns in Central and Eastern Europe, but how bad could it get? Join this 20-minute briefing on our Q3 Outlook report, including the latest on Turkey, Russia and whether Hungary’s forint has further to fall. Register now.

10 August 2022

Emerging Europe Economics Weekly

Rate hikes nearing an end, CBR’s reform ambitions

The Czech central bank’s decision to keep its policy rate on hold this week, while Romania’s hiked rates, is representative of a growing divergence between central banks in the region. We think Poland’s central bank will be the next to end its tightening cycle, while those in Romania and Hungary will remain hawkish for a few months yet. Elsewhere, Russia’s central bank set out a number of potential measures intended to help the financial system, which show that policymakers are seeking to live with Western sanctions for the long haul.
Emerging Europe Drop-In (11th Aug): We’re expecting downturns in Central and Eastern Europe, but how bad could it get? Join this 20-minute briefing on our Q3 Outlook report, including the latest on Turkey, Russia and whether Hungary’s forint has further to fall. Register now.

5 August 2022

More from Joseph Marlow

Emerging Europe Data Response

Economic Sentiment Indicators (May)

The EC’s Economic Sentiment Indicators for Central and Eastern Europe were a mixed bag in May, but there were some encouraging signs that industrial sentiment has started to improve and that price pressures may be nearing a peak. Sentiment may stabilise from here, but with spillovers from the war in Ukraine continuing to take its toll we don’t expect a large rebound for some time, which supports our below-consensus GDP growth forecasts this year.

30 May 2022

Emerging Europe Economics Update

Global slowdown and war spillovers to hit CEE exports

Exports from Central and Eastern Europe (CEE) face growing headwinds, and this feeds into our below consensus view on economic growth in the region. The larger economies in CEE such as Poland and Hungary are particularly exposed to slower growth in the euro-zone, while the Baltic states are more vulnerable to the direct spillovers from the war in Ukraine.

25 May 2022

Emerging Europe Economics Update

Bank of Israel steps up tightening

The Bank of Israel hiked its policy by a larger-than-expected 40bp today, to 0.75%, and the backdrop of a strong economy, tight labour market and mounting inflation pressures means that we think it will deliver further hikes at its upcoming meetings, to 2.25% by early next year.

23 May 2022
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