Surging global commodity prices have hit Central and Eastern European economies like a tsunami in recent months, causing a severe terms of trade shock and current account deficits to blow out. These deficits are likely to widen to 7% of GDP in Hungary and more than 8% of GDP in Romania this year. A backdrop of tightening external financing conditions, concerns about global growth and souring investor sentiment risks adding further downward pressure on currencies and pushing bond yields even higher.
EM Drop-In (Thurs, 7th July): Join our economists for their regular monthly briefing on the hot stories in EMs – and those that aren’t getting the attention they deserve. In this 20-minute session, topics will include the outlook for EM FX markets after the recent sell-offs. Register now.
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