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CBRT dodging inflation duty, Poland’s tax proposals

Turkey’s central bank raised its inflation forecasts this week and Governor Kavcioglu’s comments suggest that policymakers are unlikely to step up to the plate in the fight against inflation. Meanwhile, further details of the “Polish Deal” published this week suggest that policymakers' focus is on increasing demand rather than the economy’s supply potential, increasing the risk of overheating.
Jason Tuvey Senior Emerging Markets Economist
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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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Emerging Europe Economics Weekly

Delta fears, Hungary-EU spat, more NBU tightening

Concerns have grown over the past week about the spread of the Delta variant of COVID-19 but high vaccine coverage across much of the region has reduced the risk that policymakers will be forced to reimpose harsh restrictions on activity. Meanwhile, Hungary’s latest spat with the European Commission over the rule of law raises the possibility of delays to EU fund inflows. Finally, Ukraine's central bank delivered a surprise rate hike this week and its communications signalled that further monetary tightening lies in store.

23 July 2021

Middle East Economics Weekly

Delta variant poses biggest threat to non-Gulf economies

Concerns about the Delta variant of COVID-19 have grown over the past week but high vaccine coverage in the Gulf means that policymakers are unlikely to resort to harsh containment measures. Other parts of the region are more susceptible, adding to the reasons to think that recoveries there will lag behind in the coming years.

22 July 2021

Africa Economics Weekly

South Africa after the unrest

There are signs that the worst of the violence and unrest that has gripped South Africa this week may be over. Any hit to economic activity is unlikely to be long-lasting but the risk that the government’s austerity plans are watered down has increased.

16 July 2021
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