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Strength in October to prove short-lived The PMIs for October were fairly strong across the region and suggest that industry continued to recover last month. However, they probably understated the impact of the latest virus restrictions in CEE and we …
2nd November 2020
Strong rebound, but a renewed downturn incoming The 6.2% q/q rebound in Czech GDP in Q3 was stronger than expected, but this predated the surge in virus infections and tightening of restrictions which we expect to cause a renewed contraction in Q4. This …
30th October 2020
Sentiment takes a hit amid renewed virus surge The small fall in the EC’s Economic Sentiment Indicators for October is consistent with the region’s recovery stalling this month. But given that the data collection period for October predates the tightening …
29th October 2020
Strong Q3, but a renewed downturn lies ahead in Q4 September’s batch of Polish activity data confirmed that the economy rebounded strongly in Q3, with GDP growth likely to have increased from -8.2% y/y in Q2 to -2.5% y/y. But this strength came before the …
21st October 2020
A very disappointing end to the third quarter There were few positives in September’s batch of Russian activity data as the contraction in retail sales deepened and the recovery in the manufacturing sector stalled. The rise in virus cases and tightening …
20th October 2020
Strong recovery set to lose steam Turkey’s industrial production and retail sales data for August add to the evidence that the recovery has remained strong, although the figures appear to have been flattered by a shift in the timing of maintenance …
13th October 2020
Rising inflation to prompt pause in monetary easing Russian inflation edged up to 3.7% y/y in September and we think that it will rise a bit further over the coming months, which is likely to prompt the central bank to pause its easing cycle at its …
6th October 2020
Inflation steady but set to rise, prompting more monetary tightening Turkey’s headline inflation rate was unchanged for a third consecutive month at 11.8% y/y in September but we expect it to rise over the coming months. And with the lira still under …
5th October 2020
Pace of the manufacturing rebound slows in September The mixed batch of manufacturing PMIs across Emerging Europe for September suggest that the initial rebound in activity over the summer started to run out of steam at the end of Q3. The recovery is …
1st October 2020
Surge in virus cases yet to weigh on sentiment The further rise in the EC’s Economic Sentiment Indicators for September suggests that the recovery continued this month, albeit at a slower pace. However, we suspect that the recent rise in virus cases …
29th September 2020
Recovery stalls in the middle of Q3 The batch of Polish activity data for August show that the pace of the recovery slowed as pent-up demand following the loosening of lockdown measures eased. The recovery will probably continue over the coming months, …
21st September 2020
Mining sector provides a helping hand The batch of Russian activity data for August show that the economic recovery continued throughout the middle of Q3 as mining output recovered strongly, but activity in the retail and manufacturing sectors lost …
18th September 2020
Activity rebounds strongly at the start of Q3 Turkish industrial production and retail sales posted a strong recovery in July as the continued easing of lockdown measures and rapid credit expansion boosted activity. The tightening of monetary conditions …
14th September 2020
Inflation rises further, pace of easing cycle will slow Russian inflation rose to 3.6% y/y in August and we think that it will edge up a bit further over the coming months. This shouldn’t trouble the central bank too much, but the threat of sanctions and …
4th September 2020
Inflation holds steady, lira key to next move in monetary policy Turkish inflation was unchanged between July and August, at 11.8% y/y, but the lira rather than inflation is likely to determine the central bank’s next moves. If the lira’s recent stability …
3rd September 2020
Manufacturing sectors continue to bounce back The batch of manufacturing PMIs across Emerging Europe for August provided further signs that the economic rebound continued in Q3. Industrial sectors are likely to recover further over the coming months, …
1st September 2020
Sentiment improves further in Q3 The further increase in the EC’s Economic Sentiment Indicators for August echoes the message from other surveys and high-frequency data that the recovery gained pace in Q3. But sentiment remains far below pre-crisis levels …
28th August 2020
Activity recovering quickly to pre-pandemic levels July’s batch of Polish activity data provides further evidence that industrial production and retail sales have rebounded quickly towards pre-virus levels. The rise in localised virus cases does not yet …
21st August 2020
Economy gaining momentum at the start of Q3 The batch of Russian activity data for July suggest that the economy gained a bit of momentum at the start of Q3 following the 8.5% y/y fall in GDP in Q2 as retail sales continued to rebound. But the overall …
20th August 2020
A mixed bag across the region with Poland the star performer The Q2 GDP data for Central and Eastern Europe confirmed that the region’s industry-heavy economies suffered the largest hit in the crisis, while Poland and Bulgaria managed to escape …
14th August 2020
Turkey suffers one of world’s largest slumps in Q2 Turkish industrial production and retail sales continued to rebound strongly in June but even so it looks like the slump in GDP over Q2 as a whole is likely to have been in the region of 20% q/q or so – …
Sharp fall in output, weak recovery to follow The smaller-than-expected fall in Russian GDP of 8.5% y/y in Q2 confirms that the downturn in Russia’s economy wasn’t as bad as had been feared as the crisis unfolded earlier this year. The early signs are …
11th August 2020
Inflation ticks up but further rate cuts on the cards The rise in Russian inflation to 3.4% y/y in July is likely to be followed by a further modest increase over the next few months, but this shouldn’t prevent the central bank from cutting the policy …
6th August 2020
Drop in inflation unlikely to prompt fresh rate cuts Turkish inflation eased by more than expected in July, to 11.8% y/y, but this is unlikely to prompt the central bank to restart its easing cycle. Indeed, with pressure on the lira building, the next …
4th August 2020
Central Europe leads the recovery, Russia stuttering The further rise in the manufacturing PMIs across Central Europe in July is an encouraging sign that the economic recovery continued at the start of Q3. But the fall in Russia’s PMI last month adds to …
3rd August 2020
Sentiment improves further, but services lag behind The further rise in the Economic Sentiment Indicators in July adds to the evidence that the economies of Central and Eastern Europe are steadily recovering from the sharp downturn in Q2. That said, …
30th July 2020
V-shaped recovery after all? The rebound in Polish industrial production and retail sales in June suggests that the contraction in GDP in Q2 may be in the order of 4% y/y, much smaller than the 8-9% y/y we had expected. Activity in other parts of the …
21st July 2020
Economy starts to recover Turkish activity data for May show that industrial production and retail sales recovered from their low point in April but it still looks like Turkey suffered one of the largest contractions in Q2 across major EMs. The economic …
13th July 2020
Rising inflation should not prevent further easing Russian inflation rose to 3.2% y/y in June and we think that it will rise a bit further over the coming months. But this increase should prove temporary and inflation is likely to remain below the central …
8th July 2020
Inflation jump reinforces idea that easing cycle is over The jump in Turkish inflation in June, to 12.6% y/y, as well as last week’s surprise decision by the central bank to leave interest rates unchanged, reinforces our view that the easing cycle is …
3rd July 2020
Manufacturing sectors rebound strongly at the end of Q2 The rise in the manufacturing PMIs in June provide further signs that economic output recovered strongly at the end of Q2 as lockdown measures were lifted. While we would caution that the PMIs may …
1st July 2020
Sentiment picks up further in June The broad-based rise in June’s Economic Sentiment Indicators provide further signs that the economies of Central and Eastern Europe started to get back on their feet at the end of Q2. That said, the rebound in sentiment …
29th June 2020
Activity bounces back strongly Polish activity data for May show that activity in the retail sector bounced back more quickly than in the industrial sector as lockdown measures were lifted. Even so, the figures support our relatively optimistic view that …
22nd June 2020
Activity falls off a cliff in April The plunge in Turkish industrial production and retail sales in April suggests that the economy suffered a almighty hit to GDP in Q2 – we expect the economy to suffer one of the largest contractions across major EMs of …
12th June 2020
Easing inflation strengthens the case for further rate cuts Russian inflation eased to 3.0% y/y in May and the underlying picture is that inflation has been much weaker than many expected just a few months ago. Price pressures are likely to remain muted …
5th June 2020
Higher inflation unlikely to preclude another rate cut The rise in Turkish inflation in May, to 11.4% y/y, suggests that the effects of the sharp fall in the lira in the early part of the month more than offset the impact of weaker domestic demand on …
3rd June 2020
Manufacturing sectors slowly recovering The manufacturing PMIs repeat the message from the ESIs released last week that activity in the region rebounded in May but remained at subdued levels. As lockdowns continue to be lifted and external demand …
1st June 2020
Growth in Q1 to be followed by collapse in Q2 Turkey’s economy managed to grow in Q1 as a strong January and February more than offset a dire March. But the latest activity figures are ominous and point to a collapse in activity in Q2. The 0.6% q/q rise …
29th May 2020
Recovery slow going, for now May’s Economic Sentiment indicators suggest that the easing of lockdowns only provided a limited boost to the Central and Eastern Europe economies. The surveys are still consistent with a fall in GDP of around 6% y/y in Q2. …
28th May 2020
Output plummets at the start of Q2 The collapse in the Polish industrial production and retail sales data for April were partially offset by higher public spending on large infrastructure projects in the construction sector . This provides some …
22nd May 2020
Economy sputters in Q1, collapse coming in Q2 The slowdown in Russian GDP growth to 1.6% y/y in Q1 almost certainly failed to capture the extent of virus containment measures as the government did not implement lockdown measures until late-March. The …
19th May 2020
Coronavirus devastates the region The batch of Q1 GDP data for Central & Eastern Europe shows that the region’s economies were in freefall at the end of March after lockdown measures were imposed. A strong start to the year meant that the data in Poland …
15th May 2020
Economy in deep downturn The collapse in Turkish industrial production and retail sales in March add to the evidence that, even though the government refrained from imposing draconian lockdown measures, the economy probably contracted over Q1. More timely …
14th May 2020
Activity grinding to a halt April’s manufacturing PMIs for Emerging Europe fell off a cliff and point to industrial production declining at a record pace in Q2. With lockdown measures being lifted in the Czech Republic, activity is likely to bounce back …
4th May 2020
Fall in inflation may tempt CBRT to cut rates, but lira risks abound The fall in Turkish inflation in April, coupled with growing evidence of a sharp economic downturn, may tempt the central bank to cut interest rates further. But this would severely test …
Activity falling off a cliff The collapse in April’s Economic Sentiment Indicators to levels not recorded before in Central and Eastern Europe point to GDP falling by around 6.0% y/y at the start of Q2, more than twice as large as the worst-affected …
29th April 2020
Economy shrugs off coronavirus outbreak in Q1 The relatively strong batch of Russian activity data for March suggest that GDP growth probably picked up a touch to 2.5% y/y in Q1. However, this largely reflects the fact that Russia was much slower to …
27th April 2020
Economy heading for a collapse in output The collapse in the Polish activity data for March came on the back of two strong months and suggests that the economy probably avoided a contraction in Q1 and grew at around 2.0% y/y. But the slump in March is a …
22nd April 2020
Inflation set to rise gradually, but easing is on the cards The rise in Russian inflation to 2.5% y/y in March probably marks the start of a gradual pick-up over the next few months as the effects of the weaker ruble feed through to consumer prices. But …
6th April 2020
Drop in inflation opens door for more rate cuts The drop in Turkish inflation in March, coupled with the sharp downturn in the economy, means that the central bank is likely to follow up last month’s emergency 100bp interest rate cut with further easing. …
3rd April 2020