Emerging Europe Economics Update Russia: looser fiscal policy in store, but no splurge The resilience of tax receipts and the improved outlook for oil and gas revenues should provide scope for Russia’s government to soften its grip on the public finances and ease policy over the next... 13th April 2021 · 4 mins read
Emerging Europe Economics Update Turkey: capital controls would probably be ineffective Turkey’s large external vulnerabilities mean that aggressive rate cuts by the central bank (CBRT) would run the risk of sharp and destabilising falls in the lira. A probable next step by policymakers... 8th April 2021 · 4 mins read
Emerging Europe Economics Update Turkey: lessons from previous easing cycles Past experience suggests that, with inflation near a peak and the economy slowing (alongside pressure from President Erdogan for lower interest rates), Turkey’s central bank will push ahead and ease... 31st March 2021 · 3 mins read
Emerging Europe Economics Update New forecasts for Turkey The upheaval at Turkey’s central bank means that we now expect a 200bp interest rate cut next month followed by further aggressive easing in the second half of 2021. But the result is that inflation... 26th March 2021 · 5 mins read
Emerging Europe Economics Update Revisiting Turkey’s dire external position The replacement at the helm of Turkey’s central bank is particularly worrying against a backdrop of a dire balance of payments position, large dependence on foreign capital inflows and the central... 23rd March 2021 · 3 mins read
Emerging Europe Economics Update Direction shifting towards tightening in Hungary Hungary’s central bank (MNB) left its key interest rates on hold today but the tone of the communications could not have been much more hawkish without raising interest rates. The MNB is defending its... 23rd March 2021 · 3 mins read
Emerging Europe Economics Update Turkey’s banks are a major cause for concern The abrupt sacking of Turkey’s central bank (CBRT) governor on Friday has triggered sharp falls in the lira and a tightening of external financing conditions. The banking sector is a key source of... 22nd March 2021 · 3 mins read
Emerging Europe Economics Update Erdogan sacks Agbal, risk of currency crisis grows The shock decision by Turkey’s President Erdogan to sack central bank governor Naci Agbal late on Friday is likely to trigger large falls in the lira when markets open on Monday. It looks like the... 20th March 2021 · 3 mins read
Emerging Europe Economics Update CBR: a hike and clear signal for aggressive tightening Russia’s central bank (CBR) unexpectedly hiked its key policy rate by 25bp to 4.50% at today’s meeting in response to the recent surge in inflation and the accompanying communications sent a strong... 19th March 2021 · 3 mins read
Emerging Europe Economics Update CBRT overdelivers to reassure investors Turkey’s central bank didn’t disappoint investors, delivering a larger-than-expected 200bp interest rate hike (to 19.00%) today, and we think that it will keep monetary conditions tighter than most... 18th March 2021 · 3 mins read
Emerging Europe Economics Update Virus developments pushing back the recovery The renewed surge in virus cases and tightening of restrictions across Central Europe will deal a heavy blow to the recovery in the first half of this year. Meanwhile, slow vaccine rollouts mean that... 17th March 2021 · 2 mins read
Emerging Europe Economics Update What does Turkey need to do to bring inflation down? Turkey’s central bank (CBRT) looks set to hike interest rates further this week, and the experience from other EMs suggests that it will need to keep real interest rates elevated for several years to... 15th March 2021 · 6 mins read
Emerging Europe Economics Update CEE: semiconductor shortages add to H1 headwinds The disruption to auto production caused by semiconductor shortages is yet another reason (alongside tight COVID-19 restrictions) to expect growth in Central and Eastern Europe to struggle in H1 2021. 10th March 2021 · 2 mins read
Emerging Europe Economics Update Russian inflation now too strong for the CBR to ignore A series of strong inflation readings in Russia have put the central bank’s ability to meet its inflation target over the next year under threat and brought forward the prospect of monetary tightening... 10th March 2021 · 4 mins read
Emerging Europe Economics Update NBP extends pause, policy to stay loose for some time The Polish central bank’s latest forecasts, published this afternoon, tell a story in which the economic recovery will strengthen over the coming years and inflationary pressures will pick up strongly... 3rd March 2021 · 3 mins read
Emerging Europe Economics Update Picking apart the divergence in Central Europe in Q4 The full breakdown of Q4 GDP data for Central Europe showed that net trade exerted a drag on growth in Poland while it provided a boost to Czechia and Hungary. But looking ahead, mounting headwinds to... 2nd March 2021 · 3 mins read
