Having slowed in Q3, we expect growth in Emerging Europe to recover over the course of the next year as Russia continues to pull out of recession and investment in the Central European economies rebounds. However, the overall pace of growth will remain subdued. In Russia, while conditions in industry should improve, consumers will remain under pressure as fiscal policy tightens. In Central Europe, investment should strengthen, but there is now limited spare capacity in the region’s economies, meaning the scope for a significant recovery in output has diminished. Finally, in Turkey, while the economic impact of July’s coup attempt is starting to fade, financial vulnerabilities and tightening external funding conditions will push growth lower in 2017. The upshot is that our forecasts for growth in the region generally lie below the consensus. All told, we expect regional GDP to expand by just 1.8% next year and 2.0% in 2018
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