Emerging Europe Economics Update Turkey: financial conditions tighten sharply The Turkish lira has recovered lost ground, but financial conditions remain much tighter than they were at the start of last week and point to continued weakness in domestic demand. 27th March 2019 · 1 min read
Emerging Europe Economics Update Hungary reluctantly hikes interest rates Today’s very small interest rate hike in Hungary was the least that policymakers could do to show their commitment to the inflation target. But so long as key euro-zone export markets don’t weaken... 26th March 2019 · 1 min read
Emerging Europe Economics Update Turkish lira back in the firing line The sell-off in the Turkish lira late last week provided a timely reminder that many of the factors that drove last year’s currency crisis – including geopolitical tensions and concerns about the... 25th March 2019 · 1 min read
Emerging Europe Economics Update CBR likely to cut rates before the end of this year The Central Bank of Russia’s dovish tilt today has prompted us to bring forward some of the interest rate cuts that we had been anticipating in 2020. We now think that the policy rate will be lowered... 22nd March 2019 · 1 min read
Emerging Europe Economics Update Slowdown in Czech economy likely to continue We think that weakness in Germany and softening domestic demand will result in Czech GDP growth slowing to about 2.5% this year. This puts us at the bottom of the range of forecasters. 19th March 2019 · 1 min read
Emerging Europe Economics Update Turkey and the problem of deposit dollarisation The growing prevalence of foreign currency deposits in Turkey’s banking sector is symptomatic of the country’s long-standing inflation problem. Unless the central bank breaks with the past and brings... 13th March 2019 · 1 min read
Emerging Europe Economics Update Turkish rates on hold, easing cycle to start in June The hawkish tone of the Turkish central bank’s recent communications meant that a rate cut was never likely at today’s meeting. But with inflation set to fall further in the coming months and the... 6th March 2019 · 1 min read
Emerging Europe Economics Update Czech koruna likely to be weaker than CNB expects The Czech koruna is likely to defy the central bank’s (CNB’s) expectation that it will appreciate over the coming quarters. One consequence of this is that policymakers will probably raise interest... 28th February 2019 · 1 min read
Emerging Europe Economics Update Hungarian outperformance driven by one-off boosts Hungary was one of the fastest-growing EMs in the final quarter of last year. But almost all this was due to temporary factors and we expect that GDP growth will slow sharply this year. 21st February 2019 · 1 min read
Emerging Europe Economics Update Russian credit recovery has further to run The recent recovery in Russian private sector credit growth is likely to continue over the coming quarters, supporting our view that, despite the weakness of recent activity data, economic growth will... 20th February 2019 · 1 min read
Emerging Europe Economics Update Turkey: lira still vulnerable to swings in risk appetite The improvement in Turkey’s current account position means the lira no longer looks fundamentally misaligned, but the recent period of stability won’t last. While a repeat of last year’s currency... 19th February 2019 · 1 min read
Emerging Europe Economics Update What’s behind Central Europe’s resilience? The strength of the latest GDP figures out of Central Europe, despite weakness in Germany, partly reflects rapid wage growth and robust consumer spending. But it also looks like growth was supported... 15th February 2019 · 1 min read
Emerging Europe Economics Update Russia’s manufacturing slump should be temporary We suspect that the sharp slowdown in Russia’s manufacturing sector in the second half of 2018 was due to a fall in public spending on military and railway transport. If we’re right, manufacturing... 12th February 2019 · 1 min read
Emerging Europe Economics Update Next move in Russian rates likely to be down The less hawkish nature of the Russian central bank’s statement means that we no longer expect an interest rate hike in the coming months. Instead, with inflation likely to return to target in 2020... 8th February 2019 · 1 min read
Emerging Europe Economics Update Euro-zone slowdown worries Czech National Bank The Czech National Bank’s post-meeting communications made clear that concerns about the external environment resulted in interest rates being left on hold – rather than hiked – today. Given the Bank... 7th February 2019 · 1 min read
Emerging Europe Economics Update Romanian leu has much further to fall The Romanian government’s surprise introduction of a bank tax has put the leu under pressure recently and the country’s wide current account deficit suggests that further currency falls lie in store... 23rd January 2019 · 1 min read
