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Growth to slow in the second half

The recovery in Emerging Europe remains broadly on track. GDP growth rates are likely to prove solid, if not spectacular, in a number of countries over the coming years with Turkey, Poland and, in the near term at least, Russia leading the way. Nonetheless, while prospects are picking up, new challenges are coming to the fore and growth is likely to fade in the second half of this year. So while some Central Banks will deliver further interest rate hikes in the near term, on the whole, the pace of tightening will be slower than the market is pricing in.

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