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Weak end to Q1 Poland’s weaker-than-expected activity data for March suggest the risk to our forecast for GDP growth of 2.5% y/y in Q1 (up from 1.0% y/y in Q4) are tilted to the downside. While we maintain our above-consensus GDP growth forecast of 3.0% …
23rd April 2024
Inflation stabilises, easing cycle is not that far away The stabilisation in Russian inflation at 7.7% y/y in March was in line with expectations and adds to evidence that inflation pressures have continued to cool in recent months. The month-on-month …
10th April 2024
Door for rate cuts closing The decision by the Bank of Israel (BoI) to leave its policy rate unchanged at 4.50% (rather than cut) for the second meeting in a row underscores policymakers’ concerns about the large budget deficit, above-target inflation and …
8th April 2024
Economy running hot in Q4, momentum continues into 2024 The 4.9% y/y rise in Russian GDP in Q4 was slightly below expectations but it followed an upwards revision to growth in Q3 (to 5.7%) and suggests that the economy continued to run hot at the end of …
5th April 2024
This page has been updated with additional analysis since first publication. Extended pause likely until 2025 The National Bank of Poland (NBP) left its policy rate on hold at 5.75% today as it looked through the recent sharp drop in inflation in March. …
4th April 2024
Easing cycle just around the corner Romania’s central bank left its policy rate on hold at 7.00% as expected again today but with inflation likely to fall further, a monetary easing cycle is probably just around the corner. We maintain our view that the …
Further rise in inflation will keep pressure on the CBRT to hike The increase in Turkish inflation, to 68.5% y/y in March, will keep pressure on the central bank (CBRT) to hike interest rates further at its meeting later this month. We maintain our …
3rd April 2024
Small improvement in CEE, Russia continues to run hot The manufacturing PMIs rose across Central and Eastern Europe (CEE) in March but they remain consistent with a relatively weak recovery. Poland’s PMI inched up from 47.9 in February to 48.0, Czechia’s …
2nd April 2024
Regional sentiment hits two-year high The European Commission's Economic Sentiment Indicators for Central and Eastern Europe (CEE) generally rose in March, and support our view that regional GDP growth strengthened at the start of this year. Economic …
27th March 2024
Pace of easing slows, and will slow further before long The decision by the Hungarian central bank (MNB) to slow the pace of its easing cycle today, with a 75bp cut to its base rate (to 8.25%), will probably be followed by a further slowdown in the pace …
26th March 2024
Little change in language, possible easing from mid-2024 Russia’s central bank (CBR) left its key policy rate on hold, at 16.00%, for a second consecutive meeting as expected today and there were few notable changes in its press statement. The central …
22nd March 2024
Governor Karahan retakes the initiative Turkey’s central bank unexpectedly raised its key policy rate by 500bp at today’s meeting, to 50.00%, and its hawkish communications leave open the possibility of another rate hike in April. With the potential for a …
21st March 2024
Recovery strengthens Poland’s stronger-than-expected activity data for February suggest that loose fiscal policy and continued fast wage growth helped the economy to recover at the start of this year. We maintain our above-consensus GDP growth forecast of …
This publication has been updated with additional analysis from the post-meeting press statement and press conference. CNB’s easing cycle has a lot further to run The Czech National Bank (CNB) cut its policy rate by 50bp again today, to 5.75%, and we …
20th March 2024
This page has been updated with additional analysis since first publication. Inflation picks further, rates to stay high for some time The rise in Russian inflation to 7.7% y/y in February highlights that price pressures in the economy remain strong and …
13th March 2024
NBP keeps rates on hold, limited window for rate cuts this year The National Bank of Poland (NBP) left interest rates on hold again today, at 5.75%, and the scope for monetary easing this year looks relatively limited. We still think there is a …
6th March 2024
This page has been updated with additional analysis since first publication. Inflation continues to rise, tightening cycle now at risk of restarting The stronger-than-expected rise in Turkish inflation to 67.1% y/y in February adds to our concerns given …
4th March 2024
Turkey and Russia continue to show signs of resilience The manufacturing PMIs out of Central and Eastern Europe (CEE) generally ticked up last month, but still suggest that industrial sectors remained weak. In contrast, the increases in the PMIs in Turkey …
1st March 2024
This page has been updated with additional analysis since first publication. Economy re-accelerates in Q4 The pick-up in Turkish GDP growth to 1.0% q/q in Q4 was driven by a rebound in private consumption and suggests that aggressive monetary tightening …
29th February 2024
Economy maintains strong momentum The latest activity data for January suggest that Russia’s economy maintained solid growth at the start of this year, which supports our forecast for above-potential GDP growth of 3.0% over the course of 2024. Retail …
28th February 2024
Sentiment edges lower, but still points to recovery The European Commission's Economic Sentiment Indicators for Central and Eastern Europe (CEE) generally fell in February, but still point to regional GDP growth strengthening in Q1. Economic sentiment …
Step up in pace of easing will soon be reversed The decision by the Hungarian central bank (MNB) to step up the pace of its easing cycle today, with a 100bp interest rate cut, will probably be followed by further large interest rate cuts over the next few …
27th February 2024
BoI stands pat as inflation risks remain strong Israel’s central bank opted to leave interest rates on hold at 4.50% today – in contrast to the consensus view for a cut – and the communications continued to emphasise upside inflation risks. Policymakers …
26th February 2024
New governor committed to the tight policy stance The hawkish statement accompanying the Turkish central bank’s decision to leave interest rates unchanged at 45.00% today supports our view that a shift to monetary easing remains some way off and we still …
22nd February 2024
Domestic demand to drive the recovery Poland’s activity data for January suggest that the reacceleration in wage growth at the start of this year supported domestic demand, while the export-orientated industrial sector struggled. We think that a further …
Deep contraction highlights the extent of the conflict damage The 19.4% q/q annualised contraction in Israeli GDP in Q4 was much worse than had been expected and highlights the extent of the hit from the Hamas attacks and the war in Gaza. While a recovery …
19th February 2024
Tightening cycle comes to a close, but rates to stay high Russia’s central bank (CBR) left its policy rate on hold at 16.00% as expected today and we think that inflation pressures will prevent it from cutting interest rates for most of this year. Today’s …
16th February 2024
Plunge in inflation seals the deal on a larger rate cut We’d expected a large fall in Czech inflation in January, but the collapse from 6.9% y/y in December to just 2.3% y/y shows that price pressures are dissipating even more quickly than we’d …
15th February 2024
Inflation pressures unlikely to prompt another hike The stabilisation in Russian inflation in January, at 7.4% y/y, should provide cover for the central bank to leave its policy rate unchanged at 16.00% at its meeting on Friday, rather than continue the …
14th February 2024
At a standstill at the end of 2023 Q4 GDP figures out of Central and Eastern Europe (CEE) showed that the region ended last year on a weak note, but the outlook for 2024 looks brighter. While soft external demand is likely to remain a drag on growth over …
Above-target inflation to keep NBR in a hawkish mood The National Bank of Romania (NBR) left its policy rate on hold at 7.00% again today and, while interest rate cuts are likely to start around mid-year, we think that monetary easing will be less …
13th February 2024
Governor Karahan committed to tight policy, rate cuts some way off The communications from new Turkish central bank governor Karahan at today’s Inflation Report briefing will have helped to reassure investors that the change at the helm of the central …
8th February 2024
Economy rebounds strongly following war and sanctions shock Russia’s economy expanded by 3.6% over 2023 as a whole, marking a sharp rebound from a contraction of just 1.2% in 2022 (revised from 2.1%). The activity data for December suggest that the …
7th February 2024
Rates on hold, March rate cut is in the balance The National Bank of Poland (NBP) left interest rates on hold again today, at 5.75%, and we think that an interest rate cut at the next meeting in March looks finely balanced. Our current assumption is that …
Headline inflation picks up, all eyes on new governor Headline inflation edged up slightly in Turkey to 64.9% y/y in January, and the m/m figure – a 6.7% increase on the back of a large minimum wage hike – looked even worse. The figures highlight the …
5th February 2024
CEE industry still struggling, input prices diverge in Turkey and Russia The manufacturing PMIs out of Central and Eastern Europe (CEE) for January remained soft and haven’t changed the broad picture that the region’s industrial sectors continue to …
1st February 2024
Soft annual figure suggests weak end to 2023 The weaker-than-expected 0.2% expansion in Polish GDP over 2023 as a whole suggests that the economy struggled at the end of the year. We think this weakness will prove temporary and that activity should …
31st January 2024
This page has been updated with additional analysis since first publication. Regional recovery continues The European Commission's Economic Sentiment Indicators for Central and Eastern Europe (CEE) were a mixed bag in January, but our regional measure …
30th January 2024
The start of a slow recovery The meagre 0.2% q/q expansion in Czech GDP in Q4 confirms that the economy contracted over 2023 as a whole, and we think that this is likely to be followed by tepid growth this year. We maintain our below consensus GDP …
Hiking cycle at an end, rates to stay high The 250bp interest rate hike from Turkey’s central bank (CBRT) today, to 45.00%, marks an end to its tightening cycle. Encouragingly, the communications were relatively hawkish and suggest that policymakers …
25th January 2024
This page has been updated with additional analysis since first publication. Recovery continues in Q4 Poland’s retail sales data for December suggest that consumer spending weakened at the end of last year, although the industrial sector held up better …
22nd January 2024
Fall in inflation won’t be sustained The small fall in Russian inflation to 7.4% y/y in December is likely to be temporary, and we still think that the central bank’s tightening cycle has further to run. We expect a 100bp rate hike (to 17.00%) next month. …
12th January 2024
NBR won’t cut rates as far as most expect in 2024 The National Bank of Romania (NBR) left its policy rate unchanged at 7.00% today and, although a monetary easing cycle seems to be drawing nearer, we think that interest rates are unlikely to be cut as far …
NBP has limited scope for rate cuts in 2024 The National Bank of Poland (NBP) left interest rates on hold again today, at 5.75%, and we continue to think that the scope for monetary loosening ahead is relatively limited. While the consensus view in recent …
9th January 2024
This page has been updated with additional analysis since first publication. Regional sentiment continues to recover The European Commission's Economic Sentiment Indicators for Central and Eastern Europe (CEE) generally continued to rise in December and …
8th January 2024
Headline inflation picks up, but core inflation losing momentum The rise in Turkish inflation to 64.8% y/y in December was broadly in line with expectations and the breakdown provided some signs that underlying price pressures continue to soften. We think …
3rd January 2024
This page has been updated with additional analysis since first publication. Further weakness in CEE, but Russia continues to overheat The manufacturing PMIs out of Central and Eastern Europe (CEE) and Turkey for December suggest that industrial sectors …
2nd January 2024
Leaving the door open for one more hike Turkey’s central bank (CBRT) delivered a 250bp interest rate hike, to 42.50%, at today’s meeting and didn’t close the door on the tightening cycle. We’ve now pencilled in one more 250bp hike at the next meeting in …
21st December 2023
This page has been updated with additional analysis since first publication. Recovery stalls in November Poland’s activity data for November suggest that the economic recovery stalled last month, but we think that this is only a temporary blip. We still …
This publication has been updated with additional analysis from the post-meeting press statement and press conference. 75bp cuts to continue for the time being The Hungarian central bank (MNB) cut its base rate by 75bp again today (to 10.75%), and we …
19th December 2023