The economies of Emerging Europe are set to bounce back more strongly from the coronavirus crisis than those in many other parts of the world. Central Europe will lead the recovery. Governments have had success in slowing the spread of the virus and, as restrictions continue to be loosened, large fiscal and monetary policy support will underpin a strong rebound in activity. Recoveries will be slower in Turkey and Russia. In Turkey, the recent credit boom will support demand, but the recovery will be held back by the country’s reliance on tourism. And in Russia, the government’s limited fiscal response will increase the risk of long-term scarring on the economy and mean that it takes longer for output to recover.
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