Filtered by Subscriptions: Emerging Europe Economics Use setting Emerging Europe Economics
The batch of strong Economic Sentiment Indicators across Central and Eastern Europe this month suggests that GDP growth in the region as a whole recovered in Q4. But while the aggregate picture improved, sentiment worsened in the region’s largest economy, …
29th November 2016
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 …
23rd November 2016
The weaker-than-expected batch of Polish activity data for October suggests that the economy remained sluggish at the start of Q4. Our GDP Tracker points to growth of 2.7% y/y last month, only a touch faster than Q3’s disappointing outturn of 2.5% y/y. … …
21st November 2016
October’s activity data showed that the Russian economy’s slow recovery continued at the start of Q4, driven by improvements in industry. But the fresh downturn in retail spending confirmed that September’s better-than-expected outturn in that sector was …
18th November 2016
The weaker-than-expected preliminary Q3 GDP figures for Central and South Eastern Europe support our view that growth in the region is likely to settle at a more moderate pace of 2.5-3.0% y/y in the coming quarters. … Central & South Eastern Europe GDP …
15th November 2016
The 0.4% y/y contraction in Russia GDP in Q3 appears to be consistent, by our estimates, with a shallow fall in GDP in q/q terms. We do, however, expect the economy to return to positive (albeit sluggish) growth by early next year. … Russia GDP (Q3 …
14th November 2016
The batch of preliminary Q3 GDP figures due next week in Emerging Europe is likely to make fairly disappointing reading. While growth in Central Europe probably remained strong, we think it still slowed (and by more than the consensus expects). Russia’s …
11th November 2016
Troubles in Turkey’s tourism sector caused the current account deficit to widen even further in September, to around 4.7% of GDP. The wide external shortfall means that the lira is likely to remain under pressure, even after the recent sell-off. … Turkey …
Donald Trump’s victory in the US presidential election has raised hopes in some quarters that economic sanctions on Russia will be lifted. As things stand, this is far from certain. But even if sanctions were removed, the benefits for Russia’s economy and …
10th November 2016
Polish National Bank governor, Adam Glapinski, used this afternoon’s post-meeting press conference to indicate that interest rates are most likely to remain unchanged over the course of next year. But his view seems to be based on somewhat optimistic …
9th November 2016
The recent improvement in Turkish business surveys suggests that the collapse in industrial production in September (shown in data published today) was probably a temporary blip. Nonetheless, today’s data, coming on the back of extremely weak activity …
8th November 2016
Russian inflation once again surprised on the downside, falling to 6.1% y/y in October. This is unlikely to cause the central bank to change its mind, and interest rates will almost definitely be kept on hold at the MPC meeting in December. But today’s …
3rd November 2016
October’s manufacturing PMIs suggest that the recovery in the Russian economy resumed at the start of Q4 after a disappointing Q3. The surveys also provided early signs that the Turkish economy is coming out of the slump triggered by July’s military coup …
1st November 2016
The Central Bank of Russia’s statement accompanying its decision to keep the policy rate at 10.0% today was predictably hawkish and supports our view that monetary easing will be gradual. But the markets are underestimating the extent to which inflation …
28th October 2016
This month’s Economic Sentiment Indicators (ESIs) for Central and Eastern Europe suggest that GDP in the region as a whole expanded by a robust 3.5-4% y/y at the start of Q4. The Polish and Czech economies fared particularly well. … Economic Sentiment …
EM inflation has been driven largely by moves in commodity prices this year. The decline in food inflation seen in recent months has probably now happened, and rising fuel inflation is set to push EM headline inflation back up in the coming months, by an …
27th October 2016
The past month brought further signs of a slowdown in regional growth in Q3. Turkey is the main culprit. Growth there appears to have slowed to a crawl following July’s coup attempt, which hit consumer spending and investment, and exacerbated the downturn …
25th October 2016
Domestic political risks have taken a toll on Emerging Europe’s two worst performing currencies – the Turkish lira and Romanian leu – over the past month. For the lira, in particular, we think deepening concerns about domestic politics and large external …
21st October 2016
The Turkish MPC didn’t rule out a resumption of its easing cycle following the surprise decision to leave interest rates unchanged today, but for our part we think that further falls in the lira and the worsening inflation outlook mean the next big move …
20th October 2016
Activity data for September suggest that the Russian recovery may have stalled in the third quarter, which was largely the result of weakness in the industrial sector. Overall, we think that GDP contracted by 0.5% in Q3. … Russia Activity Data …
19th October 2016
The weaker-than-anticipated batch of Polish activity data for September were by no means a disaster, and the figures suggest overall GDP growth edged down to around 2.8% over Q3 as a whole, compared with 3.1% in Q2. … Poland Industrial Production & Retail …
Ukraine’s economy has seen rare good news over the past month as the IMF released additional funding after a long delay and recent data showed that growth strengthened. Nonetheless, there has been no resolution to the conflict in the east, and that is …
14th October 2016
A decline in tourism receipts caused Turkey’s current account deficit to widen further on a 12-month basis in August and ongoing security concerns will keep tourism revenues subdued and the external shortfall wide in the coming months. … Turkey Current …
12th October 2016
Turkish industrial production rebounded in August, after July’s slump, but the bigger picture is that growth weakened over the first two months of Q3 and September’s manufacturing PMI suggests that activity remained sluggish at the end of the quarter. All …
10th October 2016
The hit to Turkey’s economy from July’s military coup attempt is likely to be short-lived, but even once the impact dissipates, the economy’s large vulnerabilities mean activity will remain sluggish over the next couple of years. We expect below-consensus …
6th October 2016
Today’s data from the Halifax showed that house prices were more or less flat on the month in September. Therefore, it echoes the evidence provided by other indices that house prices have proved resilient to the Brexit vote. … Polish MPC talks of rate …
5th October 2016
There is mounting evidence that the Turkish central bank’s pursuit of loose monetary policy has caused inflation expectations to become unanchored, risking an upward wage-price spiral. As we explain in this Focus, higher inflation is likely to be …
The larger-than-expected fall in Russian inflation to 6.4% y/y in September is unlikely to have any impact on the outlook for monetary policy over the rest of this year, but it does reinforce our view that the headline rate will fall sharply. That should …
4th October 2016
Last month’s manufacturing PMIs suggest that Russia’s gradual recovery continued at the end of Q3, while growth in Central Europe was relatively strong. Elsewhere, the sharper-than-expected fall in Turkish inflation in September, to 7.2% y/y, reinforces …
3rd October 2016
Comments by the Romanian National Bank Governor at this afternoon’s post-meeting press conference suggest that the MPC is inching towards starting a tightening cycle, reinforcing our view that the central bank will begin to hike interest rates gradually …
30th September 2016
The Czech MPC’s post-meeting press conference reinforced our view that it will lift the exchange rate ceiling around the middle of next year. We think it’s unlikely that the koruna will strengthen significantly at that point, although concerns that the …
29th September 2016
The widespread rises in this month’s Economic Sentiment Indicators (ESIs) in Central and Eastern Europe should help to ease concerns about the region’s economic health following a run of weak hard activity data seen earlier in the quarter. Indeed, the …
The fall in oil prices has caused a considerable deterioration in Russia’s budget position, forcing the government to dip into its oil reserves. In this Update, we answer six key questions on the health of Russia’s public finances and where the risks lie. …
28th September 2016
EM inflation is now at a seven-year low. Looking ahead, it is set to ease further in most major commodity producing EMs over the coming months, providing central banks with room to cut interest rates. … EM-wide inflation drops to seven-year …
27th September 2016
Moody’s downgrade of Turkey’s sovereign credit rating this month and the loss of the country’s investment grade status caused a small and short-lived sell-off in local financial markets, but perhaps more importantly it shifted investors’ attention to the …
The Turkish MPC’s decision to cut its overnight lending rate by a further 25bp was accompanied by a clear shift in the Council’s focus to concerns about the economic slowdown. This provides even more reason to think that the MPC will continue to look …
22nd September 2016
Despite growing views to the contrary, it’s not clear to us that the Czech koruna will appreciate sharply as and when the National Bank exits the exchange rate “cap” policy. … Czech koruna not likely to see sharp gains when cap …
The rally in Hungary’s financial markets following its return to investment grade last Friday has grabbed the headlines, but in practice most of the fall in its dollar bond spreads happened in 2012-14. Elsewhere, yields on short-term Czech local currency …
21st September 2016
The decision by the Hungarian MPC to limit the use of its three-month deposit facility has been signalled as an effort to loosen monetary conditions, but recent experience suggests that it’s unlikely to do much to bring down interbank interest rates and …
20th September 2016
Russian activity data for August suggest that the economy continued to pull out of its slump, albeit very slowly. The recovery is still being driven by industry, but there are no signs of improvement in consumer-facing sectors. … Russia Activity Data …
19th September 2016
The sharp improvement in last month’s Polish activity data will ease concerns of a slowdown sparked by July’s weak figures. Our GDP Tracker suggests that growth picked up to around 3.0% y/y last month, from 2.5% y/y in July. … Poland Industrial Production …
The sweeping victory for United Russia in Sunday’s parliamentary vote reinforces the view that President Putin’s grip on power hasn’t been shaken by two years of recession. The direction of policy is unlikely to change as a result. From an economic …
The surprisingly hawkish comments by the Russian central bank Governor at this afternoon’s post-MPC meeting press-conference mean that policy easing is likely to be more gradual than we previously anticipated. We now expect the policy rate to be flat this …
16th September 2016
Russia’s Central Bank has put increasing emphasis on the importance of inflation expectations in making monetary policy decisions, but it seems that these tend to be a lagging, rather than a leading indicator of actual inflation. Accordingly, we think …
9th September 2016
The sharper-than-expected slowdown in Turkish GDP growth in Q2, to 3.1% y/y, predates July’s coup attempt and we expect growth to be much weaker in the coming quarters. Indeed, the early signs suggest that the economy may even contract in q/q terms in Q3. …
The collapse in Turkish industrial production in July provides a clear sign that the coup attempt caused severe disruptions to the economy. And leading indicators such as the manufacturing PMI suggest that activity weakened even further last month. … …
8th September 2016
The fall in Russian inflation to 6.9% y/y in August, coming alongside last month’s drop in household inflation expectations, reinforces our view that the central bank will resume its easing cycle later this month. We expect the benchmark one-week repo …
5th September 2016
The sharper-than-expected fall in Turkish inflation in August, to 8.0% y/y, is likely to be used as justification by the central bank for further modest interest rate cuts. Nonetheless, we remain of the view that inflation is more likely to rise than to …
The latest batch of PMIs from Emerging Europe suggests that, in aggregate, the region’s manufacturing sector strengthened last month. But the surveys provide further evidence that Turkey’s economy has slowed following July’s coup attempt. … Manufacturing …
1st September 2016
It’s been a very calm month for financial markets in most of Emerging Europe. One exception, however, is Ukraine where renewed tensions with Russia have caused the currency to weaken and dollar bond yields to rise. … Ukrainian markets come under pressure …
31st August 2016
