GDP data released over the past month showed that growth in Emerging Europe slumped to a postcrisis low of just 0.8% y/y in the final quarter of last year. Nonetheless, the latest surveys suggest that the region has now started to turn the corner. Turkey is leading the way, but there are also tentative signs that activity may be picking up in Poland, the Czech Republic and even Hungary. In fact, of the region’s major economies, only Russia still seems to be slowing. Looking ahead, we expect the recovery to continue over the coming months but hopes for a rapid rebound are likely to be disappointed, not least because of continued problems in the euro-zone. Our base case remains for growth of 1.8% this year and 2.5% in 2014 – an improvement on the final quarter of 2012, but not a big one.
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