Looser policy will support stronger economic growth in Russia, as well as in Turkey (so long as US sanctions don’t get much worse), in the coming quarters. In contrast, the economies of Central and Eastern Europe are likely to slow further as ongoing weakness in the euro-zone takes a bigger toll. Overall, our growth forecasts are below the consensus in most countries. Interest rates in Russia are likely to be cut further than markets are pricing in, but elsewhere monetary policy will be tighter than most anticipate.
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