Emerging Europe Economics Update Poland’s current account surplus is here to stay A collapse in foreign firms’ reinvested earnings and a stronger recovery in goods exports than imports have caused Poland’s current account surplus to swell to record levels during the pandemic. While... 2nd October 2020 · 5 mins read
Emerging Europe Economics Update CBRT clawing back credibility The Turkish central bank’s (CBRT’s) decision to hike its policy rates by 200bp today is a response to the recent lira weakness, and should help to restore the Bank’s battered credibility. The move... 24th September 2020 · 3 mins read
Emerging Europe Economics Update Lira to fall further as policy response fails to appease The Turkish lira has continued to weaken in recent weeks and, with the response by policymakers likely to fail to placate investors, we now expect the currency to fall to as low as 9.25/$ by the end... 23rd September 2020 · 4 mins read
Emerging Europe Economics Update Forint weakness to prevent further rate cuts in Hungary The decision by Hungary’s central bank to leave its base rate on hold at 0.60% today highlights that the central bank is in a bind due to high inflation and concerns about the forint. Further interest... 22nd September 2020 · 3 mins read
Emerging Europe Economics Update Rates on hold in Russia, but easing cycle is not over The decision by Russia’s central bank to leave its policy rate on hold at 4.25% today is likely to mark a pause rather than an end to its easing cycle. The central bank will maintain its cautious... 18th September 2020 · 3 mins read
Emerging Europe Economics Update Strong Czech recovery despite rise in cases The Czech Republic has seen a renewed surge in virus cases in recent weeks and now has one of the worst outbreaks in Europe. While this poses a growing downside risk to the outlook, it has not changed... 14th September 2020 · 3 mins read
Emerging Europe Economics Update Digging into Russia’s consumer recovery The rebound in Russian consumer spending since April has been supported by a more active fiscal policy stance than we had expected. Although the pace of growth will soften, spending is likely to... 10th September 2020 · 2 mins read
Emerging Europe Economics Update Slump in the Russian ruble has further to run The Russian ruble looks set to lose further ground over the coming months as geopolitical tensions and the threat of international sanctions ratchet up. We expect the ruble to drift towards 80/$ by... 8th September 2020 · 3 mins read
Emerging Europe Economics Update Rising virus cases not a major threat to the recovery New daily coronavirus cases have hit record highs across Central and Eastern Europe over the past month and authorities have responded by tightening restrictions at a local level. Health systems in... 2nd September 2020 · 4 mins read
Emerging Europe Economics Update Turkey: tourism and tighter policy to hinder recovery The 11% q/q drop in GDP in Turkey in Q2 was smaller than we had expected and we now forecast the economy to slump by 3% this year (previously 5.8%). But the recovery over the coming quarters will be... 1st September 2020 · 2 mins read
Emerging Europe Economics Update Turkey: bar for policy rate hikes is very high Turkey’s central bank kept its key policy interest rates on hold today and, while the accompanying statement acknowledged growing upside risks to inflation, it looks like that the focus will remain on... 20th August 2020 · 3 mins read
Emerging Europe Economics Update Protests in Belarus and what they mean for the region The escalation of protests in Belarus and calls for EU sanctions pose a major threat to political stability in the country and the economic outlook, but a downturn in Belarus’ economy would have... 17th August 2020 · 3 mins read
Emerging Europe Economics Update Turkey’s banks still the weak link Turkey’s banks are more vulnerable now to a sell-off in the lira and a tightening of external financing conditions than they were in the run-up to the 2018 currency crisis. 12th August 2020 · 3 mins read
Emerging Europe Economics Update Turkey’s FX reserves flashing red Turkey’s central bank (CBRT) has burned through its FX reserves to defend the lira this year, but the CBRT’s firepower is severely depleted and reserves are now so dangerously low that monetary... 11th August 2020 · 3 mins read
Emerging Europe Economics Update How will policymakers respond to the falling lira? If strains in Turkey’s balance of payments fail to ease, the central bank will probably tighten monetary conditions more aggressively within the interest rate “corridor”. But use of the corridor alone... 10th August 2020 · 3 mins read
Emerging Europe Economics Update Assessing the hit to Turkey’s current account position Turkey’s current account deficit has widened to levels not seen since 2018, which can partly be explained by a slump in tourism receipts. While this should start to reverse over the rest of this year... 6th August 2020 · 3 mins read
