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COVID-19 outbreaks diverge, booster shots rolled out

The past month has seen a growing divergence in COVID-19 outbreaks across the region, with cases still very low in Central Europe but surging in Israel and Turkey. Either way, it appears that restrictions will remain light touch and economic recoveries should stay on track. But studies showing that vaccine efficacy fades over time mean that booster shots look set to become the norm.
Jason Tuvey Senior Emerging Markets Economist
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More from Emerging Europe

Emerging Europe Data Response

Russia GDP (Q1 2022)

The 3.5% expansion in Russia’s GDP in Q1 is consistent with a small contraction in q/q terms, and this will almost certainly be followed by a steep fall in output in Q2 as the effects of Western sanctions bite hard. For 2022 as a whole, we’ve pencilled in a 12% contraction in Russia’s economy, which would be the steepest downturn since the 1990s.

18 May 2022

Emerging Europe Data Response

Central & Eastern Europe GDP (Q1 2022)

Q1 GDP figures for Central and Eastern Europe smashed expectations in Poland, Romania and Hungary and suggest that their economies were running hot at the start of the year. The war in Ukraine will dampen activity in Q2, but demand is likely to remain strong which will keep wage and inflation pressures elevated and require central banks to raise interest rates further than most expect this year. EM Drop-In (17th May): Do current EM debt strains point to a repeat of the kinds of crises seen in the 1980s and 1990s? Join our special briefing on EM sovereign debt risk on Tuesday. Register now.

17 May 2022

Emerging Europe Data Response

Israel GDP (Q1 2022)

The 1.6% q/q annualised contraction in Q1 GDP in Israel was weaker than analysts expected, but it was more or less in line with our forecast and doesn’t change the bigger picture that Israel’s economy is operating in line with its pre-pandemic trend. With inflation rising and the labour market tightening, we expect the central bank to raise interest rates from 0.35% now to over 2% next year. EM Drop-In (17th May): Do current EM debt strains point to a repeat of the kinds of crises seen in the 1980s and 1990s? Join our special briefing on EM sovereign debt risk on Tuesday. Register now.

16 May 2022

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Middle East Economics Weekly

Gulf and oil prices, Egypt remittances, PIF’s Call of Duty

The latest drop back in oil prices is unlikely to be of much concern to policymakers in the Gulf and we still think that there is a window of opportunity for fiscal policy to be loosened. Elsewhere, remittances into Egypt have held up well during the pandemic but this is unlikely to be enough to prevent falls in the pound. Finally, Saudi Arabia’s Public Investment Fund (PIF) raised its stake in a major US video game producer this week although foreign acquisitions may become rarer as the PIF heeds the call to support domestic projects.

19 August 2021

Middle East Economics Update

A dive into Saudi Arabia’s balance of payments

A rise in oil prices has supported an improvement in Saudi Arabia’s current account position, which should be in surplus over the coming years. That, combined with signs that the sovereign wealth fund is slowing its international investments, will help to limit any further decline in the Kingdom’s foreign exchange reserves. The result is that the dollar peg is unlikely to come under pressure any time soon.

16 August 2021

Emerging Europe Economics Update

Erdogan disappointed as CBRT stands pat

Turkey’s central bank (CBRT) left interest rates on hold at 19.00% today and, with inflation likely to remain elevated over the coming months and the economy having bounced back quickly from May’s lockdown, an easing cycle is unlikely to commence until the tail end of 2021.

12 August 2021
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