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The slump in output has only just begun The slump in March’s manufacturing PMIs across Central Europe to levels not seen since the financial crisis are a sign of things to come and the figures for April are likely to be a lot worse. Russia’s PMI held up …
1st April 2020
Downturn has only just begun The widespread slump in March’s Economic Sentiment Indicators (ESIs) for Central and Eastern Europe suggest that regional GDP growth slowed from 3.2% y/y in Q4 to around 2% y/y in Q1. But, with the survey not adequately …
30th March 2020
Falling inflation will prompt another rate cut The further fall in Russian inflation to 2.3% y/y in February leaves the door open for the central bank to continue its easing cycle this month. Although market expectations for easing have been pared back …
6th March 2020
Inflation rises again, but rate cuts still in play (for now) The further increase in Turkish inflation in February probably won’t be enough to deter the central bank from easing monetary policy a little more in the next couple of months. But policymakers …
3rd March 2020
Turkey’s recovery gathering pace, divergence across Central Europe The rise in Turkey’s manufacturing PMI to a two-year high in February provides further evidence that the economic recovery continued at a rapid pace at the start of 2020. Elsewhere, there …
2nd March 2020
Loose policy supports rapid growth, but imbalances building Turkey’s economy grew by a rapid 1.9% q/q in Q4 of last year and loose policy will keep it motoring along over the coming quarters. But there are increasing signs that strong growth is fuelling a …
28th February 2020
Weakness in industry is spreading February’s batch of Economic Sentiment Indicators (ESIs) for Central and Eastern Europe provided yet more evidence that weakness in industry is spreading to domestically-focused sectors. There are no clear signs of a hit …
27th February 2020
Economy started 2020 in a low gear The batch of Polish activity data for January suggest that GDP growth was broadly steady at around 3.2% y/y at the start of the year. With headwinds to growth building, the risks to our 2020 GDP growth forecast of 3.0% …
21st February 2020
Economic growth looks to have held steady at start of 2020 January’s batch of Russian activity data suggest that GDP growth was broadly steady at around 1.8% y/y. While some of the recent props to growth have started to fade, policy support is likely to …
20th February 2020
Central Europe catches Germany’s cold The weak batch of Q4 GDP data for Central & Eastern Europe show that the downturn in Germany took a bigger toll on growth across the region. Prolonged weakness in the euro-zone and softer domestic demand mean that …
14th February 2020
Economy posts strong performance in Q4 The stronger-than-expected Turkish activity data for December suggest that the economic recovery gathered steam in the final quarter of last year. Looser fiscal and monetary policy will keep the economy motoring …
13th February 2020
Drop in inflation to prompt rate cut tomorrow The larger-than-expected drop in Russian inflation to just 2.4% y/y in January primarily reflected the unwinding impact of last year’s VAT hike. But it will probably be enough to prompt the central bank to cut …
6th February 2020
Evidence of recovery in late 2019 The Russian full-year GDP growth figure of 1.3% in 2019 was well below 2018’s outturn of 2.5%, but the figures suggest that growth accelerated a little further in the final quarter of last year, to 1.8% y/y. The breakdown …
3rd February 2020
Weakness in Central Europe, but Turkey’s recovery gathering pace January’s manufacturing PMIs for Central Europe remain consistent with a further slowdown in industrial sectors over the coming months. Elsewhere, the jump in Turkey’s PMI to a 22-month high …
Rising inflation won’t deter CBRT from further rate cuts The rise in Turkish inflation in January is unlikely to sway the central bank (CBRT) away from another interest rate cut this month as policymakers cave into pressure from President Erdogan. But …
Sentiment slumps at the start of 2020 January’s batch of Economic Sentiment Indicators (ESIs) for Central and Eastern Europe point to regional GDP growth slowing to a fresh three-year low of 3.2% y/y in Q1. With signs that weak external demand is …
30th January 2020
Investment dragged down growth last year The weaker-than-expected 2019 Polish GDP growth figure of 4.0% suggests that the economy slowed sharply in the final quarter of last year. Softer activity reinforces our view that the MPC will look through the …
29th January 2020
Economy loses momentum at the end of Q4 December’s batch of Russian activity data suggests that GDP growth in Q4 was broadly unchanged from Q3’s 1.7% y/y, but the economy appears to have lost steam at the end of the quarter. That strengthens the case for …
28th January 2020
Economy slowed further in Q4 The batch of Polish activity data for December suggest that GDP growth weakened from 3.9% y/y in Q3 to a three-year low of 3.5% y/y in Q4. The slowdown in growth reinforces our view that the central bank will look through …
23rd January 2020
Economic recovery gathers pace in Q4 The Turkish industrial production and retail sales figures for November were a mixed bag but, on balance, suggest that the economy gathered pace in Q4. Looser policy means that we think the economy will record faster …
14th January 2020
Growth comes off the boil at the end of 2019 The European Commission’s batch of Economic Sentiment Indicators (ESIs) fell sharply in December, although they remain consistent with regional GDP growth holding steady at around 3.6% y/y in Q4. Robust …
8th January 2020
CBRT to shrug off higher inflation and cut interest rates this month The stronger-than-expected rise in Turkish inflation in December means that this month’s interest rate decision will be a close call. For now, we think that the central bank will cave …
3rd January 2020
Surveys for Central Europe still point to weakness ahead December’s batch of manufacturing PMIs for Central Europe remain consistent with a further slowdown in industrial production growth over the coming months, although there are tentative signs that …
2nd January 2020
Industry stutters at start of Q4, likely to be a blip October’s industrial production figures suggest that Turkey’s economy made a soft start to Q4 but more timely evidence suggest that this will prove a blip. Looser monetary and fiscal policy is likely …
13th December 2019
Falling inflation keeps door open to easing The drop in Russian inflation to just 3.5% y/y in November increases the probability of another 50bp interest rate cut at the central bank’s meeting next Friday although, on balance, we think a 25bp rate cut is …
6th December 2019
Inflation jump won’t prevent rate cuts, for now The rise in Turkish inflation in November is likely to mark the start of a steady upward trend over the next couple of years. This won’t prevent the central bank from cutting interest rates further at the …
3rd December 2019
Central Europe remains weak, Turkey continues to recover November’s batch of manufacturing PMIs for Central Europe showed a slight improvement on October’s figures but nonetheless remain consistent with a further slowdown in industrial output over the …
2nd December 2019
Economy continues to recover, strong growth likely in Q4 Turkey’s economy grew by a weaker-than-expected 0.4% q/q in Q3 but the lagged effects of policy loosening mean that the recovery is likely to gather pace over the next few quarters. The authorities’ …
Growth remains strong in Q4 The European Commission’s batch of Economic Sentiment Indicators (ESIs) for November suggest that, after slowing to a three-year low of 3.6% y/y in Q3, regional GDP growth picked up to 4.0% y/y at the start of Q4. The ESIs rose …
28th November 2019
Economy losing further momentum Polish activity data for October showed that the economy lost a bit more momentum at the start of Q4. Our GDP Tracker points to growth slowing to around 3.6% y/y, from 3.9% y/y in Q3. Activity in the industrial sector …
25th November 2019
Economy growing at a solid pace The batch of Russian activity data for October suggest that the economy started Q4 on a firm footing following Q3’s stronger-than-expected 1.7% y/y expansion. But with inflation likely to fall further, this is unlikely to …
20th November 2019
Mixed performance across the region The Q3 GDP data for Central & Eastern Europe showed that while regional GDP growth slowed to its weakest pace in over three years, growth remained strong in Hungary and Poland. But with euro-zone weakness likely to take …
14th November 2019
Industrial recovery to gather pace The rebound in Turkish industrial production in September suggests that the economy ended Q3 on a firmer footing and more timely evidence points to a further recovery in the coming months. The economy as a whole is …
Recovery gains momentum The pick-up in Russian GDP growth to 1.7% y/y in Q3 appears to have been driven by a turnaround in the agricultural and wholesale trade sectors. But even though growth has strengthened, falling inflation means the central bank’s …
13th November 2019
Below-target inflation to keep easing cycle going The decline in Russian inflation to 3.8% y/y in October is likely to be followed by further falls in the coming months, providing scope for the central bank’s easing cycle to run a little further. We …
6th November 2019
Further drop in inflation, easing cycle isn’t over just yet The drop in Turkish inflation last month probably marks the trough and inflation is likely to rise over the coming months. Pressure from President Erdogan and recent sanguine inflation forecasts …
4th November 2019
Russia & Czech weak, but Turkey likely to improve The weak Russian and Czech manufacturing PMIs for October provide reason to expect the country’s industrial sectors to continue to struggle. Meanwhile, even though the Turkish PMI fell last month, it is …
1st November 2019
Early signs of a Q4 slowdown The European Commission’s Economic Sentiment Indicators (ESIs) for October provided firmer evidence that weakness in manufacturing sectors in Central and Eastern Europe is now spreading to consumer-focused sectors. Overall, …
30th October 2019
Slowdown continues in Q3 The batch of Polish activity data for September suggest that GDP growth slowed from 4.5% y/y in Q2 to 3.8-4.0% y/y in Q3. There was a marked improvement in the industrial sector last month . Industrial production rose by 5.6% y/y …
21st October 2019
Economy struggling for momentum The soft Russian activity data for September suggest that GDP growth over Q3 as a whole was in line with Q2’s sluggish outturn of 0.9% y/y. Coming alongside low inflation, another 25bp interest rate cut at next week’s …
17th October 2019
Industrial weakness likely to be prove fleeting The larger-than-expected fall in Turkish industrial production in August is likely to prove a bump in the road, with more timely survey evidence pointing to a recovery over the coming months. That said, the …
14th October 2019
Easing cycle has further to run The fall in Russian inflation to the central bank’s target of 4.0% y/y in September is likely to be followed by a further decline in the headline rate over the coming months. We currently expect an additional 50bp of cuts …
4th October 2019
Inflation returns to single digits, more rate cuts lie in store Last month’s steep fall in Turkish inflation, taking it back into single digits, was flattered by base effects and the headline rate will rise again later this year. Even so, these figures …
3rd October 2019
Turkish recovery gathers momentum, CEE remains weak Turkey’s PMI for September provides further evidence that the economy recovered strongly in the third quarter and with policy set to be loosened further, the recovery has some legs. Meanwhile, our …
1st October 2019
Growth holding steady in Q3 The European Commission’s batch of Economic Sentiment Indicators (ESIs) for September suggest that growth held steady at 4.0% y/y in Q3. But with the industrial surveys deeply negative and signs that services sentiment is …
27th September 2019
Slowdown in growth starting to look more pronounced The relatively weak batch of Polish activity data for August suggest that euro-zone weakness is taking an increasing toll on the Polish economy. Our GDP Tracker points to growth slowing from 4.4% y/y in …
20th September 2019
Economy struggling to gain momentum The batch of Russian activity data for August suggest that the economy maintained a steady, if not inspiring, pace of growth in Q3. With growth unlikely to pick up markedly over the rest of the year, this provides …
18th September 2019
Industry rebounds, current account continues to improve The chunky 4.3% m/m rise in Turkish industrial production in July confirms that June’s dip in output was a blip. Meanwhile, the current account position has continued to improve. But efforts to …
13th September 2019
Falling inflation to keep monetary easing cycle going The fall in Russian inflation to a weaker-than-expected 4.3% y/y last month strengthens our view that the central bank will lower its policy rate by 25bp when it meets tomorrow. Soft underlying price …
5th September 2019
Inflation drop means another aggressive rate cut next week The steeper-than-expected fall in Turkish inflation in August leaves the door wide open for the central bank to cut interest rates aggressively again when the MPC meets next week. We have …
3rd September 2019