Filtered by Subscriptions: Emerging Europe Economics Use setting Emerging Europe Economics
Israel’s economy likely to weather Gaza conflict The experience of the conflict between Israel and Hamas in 2014 suggests that the economic impact of the current conflict may be limited and temporary. So long as it ends soon, we still expect a strong …
14th May 2021
Poland’s ambitious national recovery plan Poland submitted its recovery and resilience plan to the European Commission this week and, while the plan to boost long-term growth looks ambitious, it should make a major contribution towards further income …
7th May 2021
Turkey enters lockdown The imposition of a three-week national lockdown in Turkey adds to the headwinds facing the recovery and means that the risks to our GDP growth forecast for this year are skewed to the downside. President Erdogan announced this week …
30th April 2021
Putin’s fiscal giveaways, but no hurrah President Putin’s state of the nation address this week outlined more social welfare measures to help households ahead of elections in September, but the implications for growth and inflation will be limited. …
23rd April 2021
Virus peaking in CEE, but Turkey getting hit hard Third virus waves across much of Central and Eastern Europe (CEE) seem to have peaked and authorities have started to ease restrictions on activity. But the situation in Turkey has gone from bad to worse, …
16th April 2021
Russia-Ukraine tensions flare up An escalation of military tensions along the Russia-Ukraine border poses a major threat to political stability in the region and could exacerbate some existing macro vulnerabilities in both countries. For context, …
9th April 2021
Polish zloty re-touches its post-GFC lows The Polish zloty touched its weakest level against the euro this week since 2009 but we don’t expect the currency to lose further ground from here. The zloty has been one of the worst performing EM currencies over …
1st April 2021
Third waves, lockdowns and new GDP forecasts The rise in virus infections, extension of containment measures, growing headwinds to the auto sector and slow pace of vaccination means that we are revising down our GDP forecasts in Central Europe this year. …
26th March 2021
US-Russia relations reach a new low Comments from US President Joe Biden this week threatening to take a tougher stance against Russia have raised the prospect of tighter US sanctions that could deal a significant blow to Russian markets. Mr. Biden’s …
19th March 2021
Turkey’s current account on an improving trend Current account figures out of Turkey this week were a bit worse than expected but the underlying trend suggests that the economy is rebalancing. This, coming alongside a further interest rate hike next week, …
12th March 2021
CBRT: hiking again Events this week make another interest rate hike by the Turkish central bank highly likely – we now expect a 100bp rise in the one-week repo rate (to 18.0%) at the meeting on 18 th March. Two factors lie behind this shift. The first was …
5th March 2021
Pressure growing for another rate hike in Turkey The Turkish lira has been among the hardest hit EM currencies this week and, while concerns that the shift in policymaking is unravelling are probably overdone, there’s a growing risk that the CBRT will be …
26th February 2021
Oil and the ruble: a broken friendship? The threat of Western sanctions on Russia is clouding the near-term outlook, but the recent sharp increase in oil prices suggests that fiscal policy may become a bit more supportive this year and that there’s scope …
19th February 2021
Slow vaccine rollout may delay regional recovery The incredibly slow start to vaccination programmes across the region presents a growing downside risk to our forecast that the region will enjoy a strong economic recovery from Q2 . The latest data suggest …
12th February 2021
Sputnik V late-stage trial results offer optimism Russia’s vaccination programme has got off to a slow start and there are a greater number of hurdles holding back rollout than we thought. But the good news this week regarding the high efficacy of the …
5th February 2021
Vaccine hold-up threatens to delay recovery The growing tensions between the EU and AstraZeneca over COVID-19 vaccines threaten to delay the economic recovery we had pencilled in for Emerging Europe during the first half of this year. AstraZeneca …
29th January 2021
Russian inward FDI hits post-Soviet low The slump in FDI inflows to Russia last year underline how bleak the country’s medium-term growth prospects are. Figures released by the central bank this week show that Russia attracted just $1.4bn in FDI last …
22nd January 2021
Hungary side-steps EU to ramp up vaccination Vaccination programmes gathered pace across the region this week, with Turkey administering doses of China’s Sinovac vaccine and Russian President Putin ordering the mass vaccination of the population. But …
15th January 2021
Vaccination programmes struggle to take-off COVID-19 vaccination programmes have started slowly in the region and, with virus restrictions likely to be extended, or tightened further, economies will remain weak for a few more months at least. Russia has …
8th January 2021
Russian government takes aim at food price surge Moves by the Russian government this week to try to curb the rise in food inflation are unlikely to have a major impact on monetary policy, but they underline that the shift towards providing more social …
18th December 2020
Sanctions threat a reminder of Turkey’s fragility Both the US and the EU look set to impose sanctions on Turkey, which could undermine the gains from the recent shift to orthodox economic policymaking. Any sanctions are likely to be towards the milder end …
11th December 2020
Will Poland and Hungary blink? Comments by the leaders of both Hungary and Poland today suggest that their governments are unwilling to back down over their EU budget vetoes. But threats by EU officials to circumvent Poland and Hungary could make them …
4th December 2020
CEE past the worst as virus outbreaks ease There are encouraging signs that virus outbreaks have passed the worst in Central & Eastern Europe. Poland, the Czech Republic, and Slovakia have all recorded a decline in new daily infections in recent weeks. …
27th November 2020
Poland, Hungary & the EU: what’s at stake The decisions by Poland and Hungary this week to veto the EU budget and recovery fund brought to a head a conflict about the rule of law that has been brewing for some time. The EU’s concerns regarding Hungary and …
20th November 2020
Vaccine presents a shot in the arm to the recovery With most of Emerging Europe struggling to contain virus outbreaks and with the number of deaths still on the rise, news of a potential vaccine breakthrough this week is hugely encouraging. While …
13th November 2020
Sanctions risk not gone away for Russia and Turkey Joe Biden’s chances of securing the US presidency are rising and it looks like there will be a divided government in the Senate. The ruble has appreciated since the election, but the risk of tighter …
6th November 2020
Is Turkey set for an emergency rate hike? Last week’s interest rate decision by Turkey’s central bank has come back to bite hard, but talk of an emergency rate hike may be a little premature. Unsurprisingly, the decision to tweak the interest rate …
30th October 2020
So much for the optimism about Russia’s recovery… Russia’s economy lost a lot of steam at the end of Q3 as the recovery in consumer spending over the summer reversed. (See here .) The rebound was supported by social transfers from the government and the …
23rd October 2020
Headwinds facing Czech economy growing The Czech government this week announced stricter containment measures for the next three weeks in an effort to control the surge in COVID-19 cases which, on a per capita basis, is now the worst globally. Last week, …
16th October 2020
Activity data show recovery stalled in August… The latest batch of activity data for CEE disappointed in August. Growth in Czech retail sales failed to gain pace and sales slipped back into a year-on-year contraction in Hungary. The level of sales in …
9th October 2020
Geopolitical risks grow for Turkey The conflict in Nagorno-Karabakh has opened up another schism between Turkey, the EU and Russia. An escalation in tensions could trigger sharp falls in the lira and push the central bank into more aggressive monetary …
2nd October 2020
Currency concerns prompt interest rate hikes Central banks in Hungary and Turkey unexpectedly raised interest rates this week amid mounting concern about currency falls and inflation. While we think that this will ultimately be reversed in Hungary, …
25th September 2020
Drop in lira unlikely to prompt outright rate hikes The Turkish lira has come under additional pressure this week as the risk of EU sanctions has continued to rise. The central bank has tightened monetary conditions further, but an outright hike to policy …
18th September 2020
Russia’s services sector cushions the fall in Q2 GDP The production breakdown of Russian GDP for Q2 showed that the economy’s sectoral structure helped to cushion the fall in output from the pandemic. Rosstat revised its estimate for the fall in GDP from …
11th September 2020
Ruble vulnerable amid sanctions threat The ratcheting up in geopolitical tensions in Russia this week amid concerns about the use of a chemical nerve agent is a warning sign for the ruble and further falls are likely to lie in store over the coming …
4th September 2020
Turkish lira still vulnerable as EU tensions escalate The Turkish central bank’s tightening of monetary conditions has helped to stabilise the lira but the further ratcheting up of tensions with the EU mean that the risks to the currency lie to the …
28th August 2020
Reasons for caution about Turkey’s gas discovery Turkey’s discovery of gas in the Black Sea will provide some boost to the country’s external position, but it might be quickly eroded. President Erdogan unveiled the discovery on Friday of a field …
21st August 2020
CBRT does enough, for now Turkey’s central bank has acted swiftly over the past week to tighten monetary conditions and comments from officials suggest that the authorities are shifting away from directly intervening to defend the lira. The lira’s recent …
14th August 2020
CBRT unlikely to satisfy markets The sharp fall in the Turkish lira this week appears to be pushing the central bank (CBRT) towards monetary tightening. But we’re not convinced that it will do enough to placate financial markets. Towards the end of July …
7th August 2020
Czech economy one of Europe’s most resilient in Q2 Preliminary Q2 GDP figures released by the Czech Republic on Friday support our view that Central Europe will recover more quickly from the coronavirus crisis than most other EM regions. The Czech economy …
31st July 2020
EU fund proposals a major benefit for CEE This week’s agreement on the EU budget is generally a positive outcome for Central and Eastern Europe. There are two important parts of the EU budget. First, a €750bn Recovery Fund has been agreed in which the EU …
24th July 2020
Russia’s national projects kicked into the long grass The postponement of President Putin’s flagship National Projects initiative seems to pave the way for the Prime Minister’s economic recovery plan to take centre stage over the coming years. But it also …
17th July 2020
The rebound in retail sales and industrial production across Central and Eastern Europe in May supports our view that the region will experience a relatively strong recovery in the second half of this year. Data released this week provided further …
10th July 2020
NBU governor departure raises IMF deal fears This week’s resignation of Ukraine’s central bank (NBU) governor is, by itself, unlikely to upend the country’s IMF deal but failure to replace him with a credible candidate or backsliding on recent key pieces …
3rd July 2020
Putin seeks to consolidate power with referendum Russians began voting this week on amendments to the constitution which would give President Putin the opportunity to rule unfettered until 2036. The government has sweetened the deal with fiscal …
26th June 2020
Poland’s central bank likely to consider other tools Comments from Poland’s central bank (NBP) this week highlighting the risk that a stronger zloty would hold back the economic recovery suggests that the NBP may pursue a more aggressive monetary stance. …
19th June 2020
Scarring effects will be uneven across the region All economies will suffer a permanent loss of output as a result of the pandemic, but recent labour market developments offer early signs that activity in Central Europe may recover more quickly than in …
12th June 2020
Russia: a long-overdue fiscal package arrives Russia’s government unveiled a stimulus plan this week to speed up the economic recovery. The details are limited and the government is only belatedly getting its act together, but the response suggests that …
5th June 2020
Nagy departure won’t affect MNB’s dovishness The resignation of one of the Hungarian central bank’s (MNB) key personnel may lead to a simplification of the monetary policy framework but is unlikely to alter the institution’s dovish bias. After 18 years …
29th May 2020
Financial support for Turkey a sticking plaster Financing provided by Qatar and Japan has reduced the immediate threat of another currency crisis in Turkey, but ongoing efforts to defend the lira will ultimately lead to a sharp adjustment. Earlier this …
22nd May 2020