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Ending Q3 on a positive note The latest activity data suggest that Poland’s economy ended Q3 with solid momentum, and GDP is likely to have risen by 1.6% q/q (4.7% y/y) in Q3 as a whole. But with the re-opening boost fading and supply issues likely to …
21st October 2021
Inflation close to reaching a peak The further rise in Israeli inflation to 2.5% y/y in September contained no major surprises and we think it will ease towards the lower end of the central bank’s 1-3% target next year. Even so, with the recovery motoring …
15th October 2021
Economy bounces back from weak start to Q3 Turkey’s industrial sector bounced back in August following a weak start to the quarter and, while retail sales growth slowed, it looks like the economy recorded another robust increase in GDP in Q3. Industrial …
12th October 2021
Inflation hits a new high, tightening cycle may continue for longer Russian inflation accelerated to a fresh five-year high of 7.4% y/y in September and, while this was mainly driven by a sharp increase in food inflation, the central bank is likely to …
6th October 2021
Inflation rises, but further rate cuts still on the cards Turkey’s headline inflation rate rose further to 19.6% y/y in September and core inflation partially reversed its recent decline, but political pressure means that the central bank is likely to cut …
4th October 2021
Industry coming off the boil, but consumer demand remains strong Russia’s hard activity data for August showed that industry has continued to struggle while loose fiscal policy has supported consumer spending. We think that consumer demand should hold up …
1st October 2021
Supply constraints continue to weigh on output The manufacturing PMIs for September provide additional signs that supply constraints continued to weigh on output in Central Europe, although it seems that price pressures eased further. The PMIs for Czechia …
Sentiment falls again as recovery comes off the boil The continued fall in the EC’s Economic Sentiment Indicators for September provides further evidence that the regional recovery in Central and Eastern Europe has slowed in Q3 as supply disruptions have …
29th September 2021
Recovery losing steam Poland’s economy appeared to lose steam in August amid signs that global chip shortages started to weigh on industrial output and retail sales failed to reverse a dip in July. We still think that GDP will rise by a robust 1.5% q/q …
21st September 2021
Signs that re-opening inflation is fading The rise in Israeli inflation to an 8-year high of 2.2% y/y in August was partly driven by a chunky rise in housing costs, but there are signs that “re-opening inflation” in services has run its course. We think …
14th September 2021
Weak start for Turkey’s economy in Q3 Turkey’s industrial production and retail sales figures for July suggest that, after putting in a better-than-expected performance in Q2, the economy made a soft start to Q3. Industrial production contracted by 4.2% …
13th September 2021
Inflation hits fresh five-year high, tightening cycle not over Russian inflation rose to a fresh five-year high of 6.7% y/y in August and, while there are some tentative signs that price pressures have started to soften recently, we think the central …
8th September 2021
Inflation jump to delay start of easing cycle The stronger-than-expected Turkish inflation reading of 19.3% y/y in August doesn’t rule out the start of an easing cycle later this year. However, we now only see scope for an interest rate cut at the final …
3rd September 2021
Economy starting Q3 on decent footing Russia’s activity data for July show that industrial production has come off the boil, but retail sales continued to expand strongly, and the strength of consumer demand will probably keep the central bank in …
1st September 2021
Manufacturing conditions normalise as supply disruptions ease The PMIs for August suggest that manufacturing conditions have softened in Q3 as output and new orders fell further from their recent highs. More than anything, it looks like conditions are …
Economy shrugs off lockdown and expands in Q2 A strong rebound from May’s three-week lockdown meant that Turkey’s economy managed to expand by 0.9% q/q over Q2 as a whole and the early signs are that it carried this momentum into Q3. Robust growth and …
Retail sales drop, but industry continues to thrive Polish industrial production continued to expand at a solid pace in July while retail sales fell as the re-opening of the economy shifted spending away from goods. The big picture is that the economy …
20th August 2021
Re-opening boost pushes CEE economies above pre-pandemic levels The Q2 GDP data for Central and Eastern Europe revealed that the regional recovery gathered pace last quarter as economies reopened following virus waves in Q1. We expect the recovery to …
17th August 2021
Re-opening boost pushes economy far above pre-pandemic level The larger-than-expected 15.4% annualised expansion in Israeli GDP in Q2 took the economy to more than 3% above its pre-pandemic level. While we expect growth to slow markedly in Q3 as the …
16th August 2021
Strong GDP growth takes economy back to pre-pandemic level The larger-than-expected 10.3% y/y expansion in Russian GDP in Q2 suggests that the economy returned to its pre-pandemic level as growth was driven by broad-based strength across sectors. Growth …
13th August 2021
Strong GDP growth to give the NBP food for thought The 1.9% q/q expansion in Poland’s GDP in Q2 left the economy 0.5% above its pre-pandemic size and we expect another strong reading for Q3 as activity in consumer-facing sectors continues to recover. …
Economy bounces back quickly from lockdown Turkey’s industrial production and retail sales figures for June confirm that the economy bounced back quickly from May’s three-week lockdown. This, coming alongside the further jump in inflation in July, means …
12th August 2021
Strong core inflation to trigger further rate hikes Although Russian headline inflation came in at a slightly-weaker-than expected 6.5% y/y, that masked a worryingly strong rise in core inflation that’s likely to trigger further monetary tightening. We …
6th August 2021
Inflation jumps again, but CBRT unlikely to respond with rate hike The further jump in Turkey’s headline inflation rate to 19.0% y/y in July is unlikely to trigger an interest rate hike but it will delay the start of an easing cycle until the back end of …
3rd August 2021
Supply disruption weighing on output in Czechia and Poland The PMIs for July suggest that supply chain disruptions weighed on output in Czechia and Poland and continued to put upward pressure on prices. Meanwhile, the releases suggest that manufacturing …
2nd August 2021
Weaker-than-expected rebound as economy re-opens The disappointing 0.6% q/q expansion of Czech GDP in Q2 suggests that industry may have fared worse than expected as input shortages took a greater toll on output. With virus restrictions easing further …
30th July 2021
Sentiment drops back, price pressures building The EC’s Economic Sentiment Indicators showed a surprising fall in regional sentiment in July, but we suspect that this was a blip rather than the start of a trend. We still expect growth to be strong in Q3, …
29th July 2021
Russia’s recovery continues at a solid pace in Q2 Russian activity data for June showed that the economy expanded at a solid pace in Q2, with overall GDP probably returning to just shy of its pre-pandemic level. While the re-opening boost will fade in Q3, …
28th July 2021
Economy loses a bit of momentum in June Polish industrial production and retail sales figures for June suggest that the rebound in economic activity softened a touch at the end of Q2, but GDP still looks to have expanded by 2.0% q/q in Q2. We think the …
21st July 2021
Still few signs of widespread pressures building The rise in headline inflation in Israel to a near 8-year high of 1.7% y/y in June was largely a result of base effects that pushed up food inflation. The muted 0.1% m/m rise in prices suggests that …
15th July 2021
Industry holds up well but retail suffers during three-week lockdown Turkey’s activity figures for May, the month of a three-week national lockdown, showed that the industrial sector came through unscathed but that retail sales were hit hard. More timely …
13th July 2021
Inflation rise will spook CBR The further rise in Russian inflation to a stronger-than-expected 6.5% y/y in June means the central bank (CBR) is likely to up the pace of tightening when it meets in a couple of weeks. A 75bp hike (to 6.25%) seems most …
7th July 2021
Inflation picks up, start of easing cycle likely to be delayed The fresh rise in Turkey’s headline inflation rate to 17.5% y/y in June, coupled with signs of a strong rebound in activity after May’s three-week lockdown, means that an interest rate cut in …
5th July 2021
Price pressures continue to mount The PMIs for June suggest that manufacturing sectors strengthened in Turkey, Czechia and Poland but weakened in Russia. Meanwhile, in Czechia and Poland, supply chain disruptions intensified, and there was further …
1st July 2021
Strong recovery continues, price pressures building The EC’s Economic Sentiment Indicators showed a further rise in regional sentiment in June, driven by improvements in retail and services sectors. That said, there is also continued evidence of growing …
29th June 2021
Economy roars back to life as restrictions lifted Polish retail sales rebounded strongly in May as restrictions were lifted, while industry continued to expand at a solid pace. GDP looks set to return to its pre-virus level in Q2 and we expect the …
22nd June 2021
Early signs of the re-opening pushing up core inflation The rise in inflation in Israel to 1.5% y/y in May was partly driven by food and energy, but there are some signs that underlying price pressures have increased. We think that inflation will rise …
15th June 2021
April figures point to fall in GDP in Q2 The m/m falls in Turkish industrial production and retail sales in April are likely to be followed by further weakness in May (when a three-week lockdown was in place). This supports our view that the economy will …
11th June 2021
Sharp rise in inflation, 50bp rate hike now a real possibility on Friday The larger-than-expected rise in Russian inflation to 6.0% y/y in May was driven by broad-based increases in both food and non-food goods and we think that the balance of factors is …
7th June 2021
Retail sales pick up strongly as recovery takes hold Russian activity data for April were relatively strong and suggest that a sustained recovery is taking hold in Q2 thanks to an easing of virus restrictions on services sectors and continued rebound in …
4th June 2021
Inflation eases, but President Erdogan will have to wait for rate cuts The latest falls in the lira mean that, despite the fall in Turkey’s headline inflation rate to 16.6% y/y last month, the central bank (CBRT)will probably leave interest rates …
3rd June 2021
Price pressures intensify further in Poland and Czechia The rise in the manufacturing PMIs to fresh record highs for Czechia and Poland in May was driven by output and new orders, but supply issues have continued to push up input and output prices. In …
1st June 2021
Region recovering quickly, but price pressures rising The EC’s Economic Sentiment Indicators showed strong increases in most countries in May, largely driven by improvements in services sentiment as economies have started to re-open. This is likely to be …
28th May 2021
Soft start to Q2, recovery to start from May onwards The m/m fall in industrial production and retail sales in Poland in April confirmed that the country’s third virus wave caused the economy to start the quarter on a soft note. But with new virus cases …
24th May 2021
Unexpected contraction in Q1, clouds form over the outlook The surprise 6.5% annualised contraction in Israeli GDP in Q1 largely reflected the impact of a vehicle tax hike on consumption and a sharp fall in government consumption. We expect GDP to rebound …
18th May 2021
Divergent performance in Q1, recovery to gather pace in Q2 The Q1 GDP data for Central and Eastern Europe revealed a divergence in performance between the regions’ economies amid third virus waves, with Hungary and Romania outperforming. With virus …
Economy recovers in Q1 as Russia avoids a third virus wave The improvement in Russian GDP growth to -1.0% y/y in Q1 was largely driven by a slight easing of containment measures as virus cases continued to fall during the winter. The vaccine rollout is …
17th May 2021
Few signs of “reopening inflation”, policy to stay loose The latest inflation figures for Israel provided few signs that the reopening of the economy resulted in a pick-up in price pressures in April. This supports our view that inflation will remain in …
14th May 2021
Recovery to gather steam in second half of the year Poland’s economy performed a little worse than most had expected in Q1 and the tightening of restrictions to curb a third wave of COVID-19 means that quarterly growth in Q2 is likely to be slower still. …
Growth over Q1, but fresh contraction likely in Q2 Turkey’s activity figures for March suggest that the economy recorded further growth in Q1. But the recovery lost steam over the quarter and the combination of more restrictive virus containment measures …
11th May 2021