Aggregate GDP growth in Emerging Europe appears to have slowed from 1.9% y/y in Q4 to around 1.3% y/y in Q1. While we don’t anticipate much of a rebound in the coming quarters, it does at least appear that the slowdown in regional growth is bottoming out. The latest data suggest that Turkey’s economy has passed the worst of its downturn. And the recovery in regional growth will be supported by stronger activity in Russia as fiscal policy becomes less restrictive. Growth in Central and Eastern Europe, by contrast, is set to weaken. But this should be a gradual slowdown as robust domestic demand mitigates the impact of weakness in key euro-zone trading partners.
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