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Activity growing at a more subdued pace The latest industrial production and retail sales data for Turkey for April suggest that GDP growth is likely to have remained subdued this quarter following the Q1 slowdown. A shift towards economic orthodoxy – …
13th June 2023
Inflation ticks up as central bank sounds hawkish Russian inflation picked up slightly to 2.5% y/y in May and we think it will rise above the central bank’s 4% target in the coming months. Against a backdrop of large upside inflation risks and the hawkish …
9th June 2023
Energy drags headline inflation lower The fall in Turkish inflation to 39.6% y/y in May was largely driven by a sharp fall in energy prices, while core inflation increased . Bringing inflation down sustainably will require a major policy tightening and …
5th June 2023
PMIs stabilise, but growth to remain tepid The manufacturing PMIs for May across Emerging Europe were either flat, or edged up slightly, providing further evidence that the worst of the regional downturn is probably now behind us. That said, the PMIs …
1st June 2023
Economic momentum sustained at the start of Q2 The continued growth of Russian industrial production and retail sales in April suggests that the strength of activity seen in Q1 continued at the start of Q2. This momentum is likely to be sustained in the …
31st May 2023
Solid Q1, but economy set for slowdown in growth Turkey’s economy shrugged off the impact of the earthquakes in February and grew by 0.3% q/q (4.0% y/y) in Q1. GDP growth is likely to remain soft in q/q terms this year, but a continuation of President …
Activity continues to struggle Industrial production and retail sales data for April for Poland were generally on the weak side and suggest that the economy lacked momentum at the start of Q2. We think activity will soon bottom out, but the prospect of a …
23rd May 2023
Q1 acceleration, on track for full-year growth The smaller-than-expected 1.9% y/y contraction in Russian GDP in Q1 suggests that the economy has turned a corner and that growth accelerated in q/q terms at the start of this year. Industry and retail sales …
17th May 2023
Economy slowing, but growth remains solid GDP growth remained fairly solid in Israel in Q1 (2.5% q/q annualised) as it came in slightly above expectations thanks to an unexpected surge in business investment. We think growth will come in below potential …
16th May 2023
Downturns ease, but growth to remain weak Q1 GDP data for Central and Eastern Europe were fairly weak, but Poland’s economy beat expectations and the worst of the regional downturn appears to have passed. Even so, headwinds remain strong and a sustained …
Inflation hits a new multi-year low Russian inflation continued to defy expectations in April as it slumped to a joint three-year low of 2.3% y/y, which will comfort the central bank . But it is a puzzle as to why inflation pressures remain so soft. We …
12th May 2023
Activity bounces back after earthquake disruption Industrial production and retail sales bounced back strongly in March, supporting our view that the impact of the earthquakes was short-lived. GDP growth is likely to have remained positive in Q1. But the …
Economy posts strong growth in activity in Q1 Industrial production and retail sales continued to recover strongly in Russia in March and suggest that GDP growth may have accelerated in Q1. The economy appears to be receiving a boost from the recent surge …
3rd May 2023
Disinflation process continues, but smaller falls from here Inflation in Turkey fell a bit more than expected in April, to 43.7% y/y, driven largely by a sharp decline in energy inflation, but m/m price growth remained strong and the disinflation process …
The 0.1% q/q expansion in Czech GDP in Q1 means that the economy avoided remaining in a technical recession by the skin of its teeth, but we think that growth will still disappoint consensus expectations this year. Meanwhile, the manufacturing PMIs for …
2nd May 2023
Fall in sentiment points to tepid growth The EC’s Economic Sentiment Indicators (ESIs) for Central and Eastern Europe generally fell slightly in April, with our regional measure declining for the first time in six months. On past form, the ESIs suggest …
27th April 2023
Weak first quarter, economy to flatline March’s activity data out of Poland were weaker than expected and suggest the economy may now be in a technical recession. Activity may start to bottom out soon, but we don’t think the economy is set for a marked …
24th April 2023
Sharp fall in inflation as base effects pass through Russian inflation fell sharply in March, to 3.5% y/y, as the surge in prices after the war started to fall out of the annual comparison. The 0.4% m/m increase suggests that price pressures generally …
12th April 2023
Earthquakes take their toll on activity Turkish industrial production and retail sales figures for February showed that the impact of the earthquakes on the economy was larger than we and most others had anticipated. But we think this will be short-lived …
Overall picture remains downbeat, but some green shoots Manufacturing PMIs for March were weak in Czechia and Poland and suggest that industry remained in recessionary territory in Q1. But there were some bright spots, including the improvement in …
3rd April 2023
Sentiment improving, but still weak The EC’s Economic Sentiment Indicators (ESIs) for Central and Eastern Europe increased in March and suggest that the region’s growth prospects have brightened. But sentiment is still at depressed levels, supporting our …
30th March 2023
Economy continues to recover in Q1 The improvement in the Russian industrial production and retail sales data for February provide further evidence that economic activity recovered at the start of this year. We think that GDP is likely to have expanded in …
29th March 2023
Struggling for momentum February’s activity data out of Poland paint a weak picture and support our view that GDP will, at best, flatline over 2023 as a whole. Even so, the central bank has little scope to help and we expect that high (albeit falling) …
21st March 2023
Economy continues to boom in early 2023 The large increases in industrial production and retail sales in Turkey in January suggest that the economy got off to a strong start in early 2023. Activity will have been disrupted from the earthquakes last month, …
13th March 2023
Broad-based falls in inflation last month Russian inflation came in slightly softer than expected in February, at 11.0% y/y, and it will fall to the central bank’s 4% target in March as base effects pass through. We don’t think there’s been enough …
10th March 2023
Inflation declines, but disinflation process slows Inflation in Turkey fell to 55.2% y/y in February, but underlying price pressures remain strong and the disinflation process appears to be happening more slowly than had been expected. Inflation will stay …
3rd March 2023
Industrial downturns in CEE bottoming out The manufacturing PM Is for February suggest that industrial sectors in Central and Eastern Europe are continuing to struggle, but there are tentative signs that the region may now be past the worst of its …
1st March 2023
Strong Q4, but slowdown in store for 2023 Turkey’s economy expanded by 0.9% q/q (3.5% y/y) in Q4, but growth remained unbalanced as it was driven largely by private consumption while net trade provided a sizable drag. We think growth will slow towards …
28th February 2023
The EC’s Economic Sentiment Indicators (ESIs) continued to rebound across Central and Eastern Europe in February, with our regional weighted measure hitting an eight-month high. It is broadly consistent with the region having passed the worst of its …
27th February 2023
A weak start to 2023 Poland’s softer-than-expected activity data for January suggest that the economy started 2023 on weak footing and we expect it to struggle for momentum over the first half of the year as high inflation and tight monetary conditions …
21st February 2023
Shallower contraction in GDP as sanctions hit fades The 2.1% contraction in Russian GDP in 2022 was smaller than expected and is consistent with an expansion in Q4, providing further evidence to suggest that the economy stabilised after the initial hit …
20th February 2023
Economy struggles despite strong GDP print The surprise acceleration in Israel GDP growth in Q4, to 5.8% q/q annualised, is not as good as it seems at first sight. The strength was largely driven by an unexpected surge in expenditure on personal …
16th February 2023
Recessions hit in Hungary and Czechia, further weakness ahead The falls in GDP in Central and Eastern Europe shown in the Q4 figures probably mark the worst of the regional downturn, but we still think that activity will (at best) only stagnate over …
14th February 2023
Economy likely to have rebounded strongly in Q4 The rebound in industrial production in Turkey in December and the strength of retail sales in recent months point to an expansion of GDP in the order of 0.5-1.0% q/q in Q4. Activity will be disrupted this …
10th February 2023
Q4 stronger than expected The latest industrial production and retail sales data for Russia for December were relatively weak, but Q4 was a bit stronger than we had expected and the economy is likely to have expanded slightly in the final quarter. Over …
8th February 2023
Signs of improvement The manufacturing PMIs for January rose in most countries and add to evidence from other surveys that, while economies in Central and Eastern Europe may struggle in the early part of this year, the outlook for economic activity is …
1st February 2023
Recession underway The 0.3% q/q contraction in Czech GDP in Q4 confirmed that the economy was in recession over the second half of last year. The outlook for the economy has brightened a bit in recent months as natural gas prices have fallen sharply and …
31st January 2023
Sharp slowdown in Q4, but sentiment improves further in January Economic sentiment in Central and Eastern Europe picked up again in most countries in January and our regional-weighted measure hit a four-month high. We still think that GDP in most …
30th January 2023
A Q4 fall in GDP The 4.9% increase in Polish GDP over 2022 as a whole is consistent with a slowdown in growth to around 1.6% y/y in Q4 and a small quarterly decline in output of around 0.5% q/q, confirming that the economy slumped towards the end of the …
Industry resilient, but retail sales hit by high inflation Polish industrial production remained resilient in December but high inflation weighed heavily on real incomes and took its toll on retail sales. On balance, we think that Poland’s economy is …
23rd January 2023
Further fall in inflation despite utility price hike The softer-than-expected inflation reading in Russia in December, of 11.9% y/y, is likely to be followed by further sharp falls in the coming months towards 4% as last year’s surge in prices passes …
13th January 2023
Deep downturn in Q4, but signs of improvement in December The latest EC Economic Sentiment Indicators for Central and Eastern Europe point to a regional decline in GDP in the order of 0.5% q/q in Q4, but it was encouraging that sentiment increased for the …
6th January 2023
Resilience to give way to mild recession November’s activity data for Poland were much better than expected and provide further evidence of the economy’s relative resilience to the drags from high inflation and interest rates. Even so, we still expect a …
21st December 2022
Economy shows some resilience The large increases in both industrial production and retail sales in Turkey in October provide clear signs that activity is holding up well despite the various domestic and external headwinds. But we doubt this resilience …
13th December 2022
Inflation pressures remain soft Russian inflation fell further last month, to 12.0% y/y, and the breakdown provided further signs that demand remains very weak. But this won’t offset the central bank’s concerns about pro-inflation risks and policymakers …
9th December 2022
Mixed bag, but industrial weakness likely in Q4 The manufacturing PMIs for November were a mixed bag, but suggest that weakening demand and the fading boost from easing supply shortages has begun to take a heavier toll on industrial sectors in Turkey, …
1st December 2022
Economy lacking momentum The October retail sales and industrial production data for Russia tell more of the same story: an economy that has passed the worst of the downturn, but that is desperately struggling for momentum. An outright contraction in Q4 …
30th November 2022
Economy comes off the boil in Q3 Turkey’s resilience since last year’s currency crisis came to an end in Q3 as the economy contracted by 0.1% q/q. Private consumption remained strong, but fixed investment declined and net trade was a large drag. We expect …
Sentiment improves, but recessions still likely The EC’s Economic Sentiment Indicators increased in most Central and Eastern European economies in November, but sentiment remains at levels that have been consistent with recessions in most countries in the …
29th November 2022
Soft start to Q4 October’s activity data for Poland suggest that the economy lost some steam at the start of Q4 and we think it was probably at the start of recession. We expect that evidence of a deeper downturn taking hold over the coming months will …
23rd November 2022