My subscription
...
Filters
My Subscription All Publications

Storm brewing in Turkey, Czech easing restrictions

The coronavirus is having a significant impact on Turkey’s balance of payments and, while the lira broke through 7/$ today, efforts to defend the currency are far from over. This risks a much larger and sharper adjustment akin to the 2018 currency crisis. Meanwhile, there are encouraging signs across Central Europe that the virus outbreak has been brought under control, particularly in the Czech Republic where the government has relaxed restrictions. This offers some hope that the collapse in activity may be shorter than we’d previously thought. But the recovery still faces major headwinds.
Jason Tuvey Senior Emerging Markets Economist
Continue reading

More from Emerging Europe

Emerging Europe Economics Update

Q&A on Russia’s budget, deficit financing & default

In this Update, we answer a number of key questions on Russia’s public finances, including the likelihood of a sovereign default, the impact of higher energy prices and the collapse of the economy on the budget position, and how the government would be able to finance a budget deficit.

23 May 2022

Emerging Europe Economics Update

Bank of Israel steps up tightening

The Bank of Israel hiked its policy by a larger-than-expected 40bp today, to 0.75%, and the backdrop of a strong economy, tight labour market and mounting inflation pressures means that we think it will deliver further hikes at its upcoming meetings, to 2.25% by early next year.

23 May 2022

Emerging Europe Data Response

Poland Activity Data (Apr.)

April’s activity data for Poland suggest that the economy lost some steam at the start of Q2 and the effects of the war in Ukraine will remain a key headwind over the coming months. That said, we think Poland will avoid a contraction and outperform its peers in the rest of the region over 2022 as a whole.

23 May 2022

More from Jason Tuvey

Emerging Europe Economics Weekly

Lira touches new low, CEE bond yield divergence

It's been a rocky week for the Turkish lira amid more changes at the central bank and political upheaval regarding a possible link between politicians and organised crime. This, coming alongside high inflation, has reduced the chances of an interest rate cut at the next meeting in June. Meanwhile, local currency bond yields have diverged in Central Europe recently, but we don't think this will continue and see scope for further rises in yields over the coming years, particularly in Czechia.

28 May 2021

Africa Economics Update

Nigeria’s recovery to remain stuck in first gear

The pick-up in Nigeria’s GDP growth in Q1 was driven in large part by the oil sector and rising oil output will support a further acceleration in growth over the coming quarters. But FX restrictions, limited fiscal support and a very slow vaccine rollout mean that the recovery is likely to remain stuck in the slow lane.

24 May 2021

Africa Data Response

South Africa Consumer Prices (Apr.)

The jump in South Africa’s headline inflation in April, to 4.4% y/y, was driven by energy price effects but there were signs that broader price pressures are starting to build. But even so, we think that the Reserve Bank will keep rates on hold for longer than investors currently expect in order to support the economy.

19 May 2021
↑ Back to top