Fresh virus outbreaks and tighter containment measures mean that the economies of Emerging Europe are likely to suffer a fresh downturn in Q4, but we still think that the region will bounce back more strongly from the crisis than many other parts of the world in 2021. Central Europe will lead the way, but it will take longer for the economies of Russia and Turkey to return to their pre-virus growth paths. Monetary policy in Russia, Poland, and the Czech Republic is likely to be looser than is currently priced into financial markets. But in Turkey and Hungary, the direction is skewed towards further tightening.
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