The recovery in Emerging Europe has fizzled out in recent months and we think growth will be sluggish over the coming quarters. The crisis in Ukraine presents one headwind, particularly for Russia. But growth prospects in the rest of the region will hinge to a much greater extent on the euro-zone, where it looks like the recent soft patch will continue in the near-term. As such, regional growth over the second half of the year is likely to be weaker than in the first half. So long as Germany muddles through, we don’t think the recovery in Central Europe will go into reverse. Indeed, we expect growth to pick up again in 2015-16. In contrast, Russia and Turkey face deeper seated problems and growth is likely to disappoint.
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