Filtered by Subscriptions: Emerging Europe Economics Use setting Emerging Europe Economics
Turkey’s economy enjoyed a strong first half of the year, but growth is close to peaking and we think that it will slow in 2018-19, and by more than most expect. What’s more, given the vulnerabilities that have built up in the banking sector, the risk is …
23rd August 2017
The raft of second quarter GDP data released over the past few weeks showed that growth in Emerging Europe as a whole accelerated to around 3.7% y/y, its fastest pace since 2011. The pickup in growth was widespread across the region. It’s tempting to pin …
22nd August 2017
The raft of strong Polish activity data for July suggests that the economy grew by around 4.5% y/y at the start of the third quarter. That would be even faster than the rapid rate of expansion seen over the first half of this year. … Poland Industrial …
18th August 2017
Russian activity data for July were a bit softer-than-expected, but overall they suggest that the economy continued to grow by over 2% y/y at the start of Q3. … Russia Activity Data …
17th August 2017
Today’s strong batch of Q2 GDP data from Central and South Eastern Europe support our above-consensus growth forecasts for this year as a whole. Looking ahead, GDP growth is likely to peak in Q3 in most countries, before starting to lose some momentum at …
16th August 2017
Russia’s better-than-expected 2.5% y/y GDP growth recorded in Q2 supports our view that the recovery from the recent recession would surprise many on the upside. We have revised our forecasts, which were already above consensus, up to 2.3% this year and …
11th August 2017
July’s stronger-than-expected Czech inflation data support our view that the National Bank’s monetary tightening cycle will be more aggressive than the markets are pricing in. While our central view is that the next rate hike won’t come until early-2018, …
9th August 2017
We think that natural unemployment rates have fallen by 2.5-3.0%-pts in Central & Eastern Europe over the past decade. Even so, actual rates of unemployment are now significantly below these (lower) natural rates. And, in contrast to many developed …
8th August 2017
Turkish industrial production data was a little weaker than expected in June, but the figures still suggest that GDP growth in Q2 was probably stronger than in the first quarter of the year. … Turkey Industrial Production …
The sharper-than-expected fall in Russian inflation last month means that the central bank, having paused its easing cycle last week, looks set to cut interest rates at next month’s Board meeting. … Russia CPI …
4th August 2017
The statement accompanying the Czech MPC’s meeting, at which it hiked interest rates for the first time in nine years, was relatively dovish and adds to the impression that this will be a gradual tightening cycle. That said, we think inflation is likely …
3rd August 2017
The Polish government’s controversial proposals to reform the judiciary have been met by a backlash both domestically and from the EU. In this Watch, we take a closer look at how the saga could play out and explain why Poland’s current stage in the …
The sharper-than-expected fall in Turkish inflation, to 9.8% y/y last month, from 10.9% y/y in June, is likely to make the central bank more confident that it can reverse the monetary tightening undertaken at the start of the year. … Turkey CPI …
Last month’s manufacturing PMIs for Emerging Europe suggest that the recovery in Russia’s economy continued at the start of Q3, but provided further evidence that growth in the rest of the region weakened a little. … Manufacturing PMIs …
1st August 2017
The surge in Turkish equities earlier this year appears to have been aided by improvements in the real economy, but the more recent rise has been due to global risk appetite. There is scope for further gains over the rest of this year and in 2018, but we …
31st July 2017
The Russian central bank’s decision to pause its easing cycle was motivated by last month’s higher-than-expected inflation outturn. But we expect inflation to fall back to the central bank’s target towards the end of the year and drop below target in …
28th July 2017
This month’s Economic Sentiment Indicators suggest that growth softened a touch in the major economies of Central and Eastern Europe at the start of Q3. But the surveys are still consistent with growth of around 4.0-4.5% y/y in the region as a whole. … …
The tone of the Turkish MPC statement published at today’s meeting remained relatively hawkish, but we think that falling inflation is likely to prompt the Council to start loosening monetary policy later this year and in 2018. … Turkish MPC stands pat, …
27th July 2017
EM inflation fell in June to its lowest rate since the aftermath of the global financial crisis. With the decline in fuel inflation close to bottoming out, we think EM inflation will trough in the coming months. But even so, the big picture is that it is …
The recent loosening of fiscal policy in Turkey seems, in part, to be a justified response to the economic slump following last year’s coup attempt. But any sign that it represents the start of a more fundamental shift away from fiscal orthodoxy would …
26th July 2017
The scale of the decline in inflation in Central Europe over the past month has taken many by surprise and reinforced expectations in the financial markets that monetary policy will remain very loose. However, this fall in inflation was due almost …
Russian activity data for June suggest that the economy grew by 1.5% y/y over Q2 as a whole. That would be the fastest pace of GDP growth since 2013 and supports our view that growth both this year and next will be stronger than most think. … Russia …
19th July 2017
The batch of strong Polish activity data for June suggests that the economy grew by a robust 4% y/y in Q2 – in line with Q1’s outturn. … Poland Industrial Production & Retail Sales …
The change of Romania’s government late last month has prompted a shift in the direction of fiscal policy from loosening to tightening. But the new administration has struggled to put together a legislative agenda and has already backtracked on several …
14th July 2017
The fall in Czech headline inflation last month was the result of weaker fuel inflation, but core inflation appears to have risen further above the central bank’s target. As a result, we think it’s more likely than not that the MPC will raise interest …
12th July 2017
With Turkish inflation now on a downwards path, it seems increasingly likely that the central bank will start to loosen monetary conditions before the year is out. The easing cycle will probably begin slowly, but overall we think the average cost of …
11th July 2017
Despite the slowdown in Turkish industrial production growth in May, it still looks like overall GDP growth may have been stronger in Q2 than it was in Q1. … Turkey Industrial Production …
10th July 2017
The sharp improvement in business and consumer confidence in Hungary – where various survey measures hit record-highs in Q2 – doesn’t appear to reflect a pick-up in actual GDP growth. We think it’s likely that growth remained broadly unchanged in Q2 at …
7th July 2017
The sharper-than-expected rise in Russian inflation last month, to 4.4% y/y, was driven by an increase in fruit and vegetable inflation. Core inflation fell to a record low. Accordingly, we still think it’s more likely than not that the central bank will …
6th July 2017
The recovery in GDP growth in Emerging Europe is close to peaking and, while we expect the region’s largest economy, Russia, to strengthen over the next 12 months or so, that will be more than offset by weakness elsewhere. The cycle in Central and Eastern …
The press statement that followed today’s MPC meeting in Poland remained extremely dovish, but it does seem that there are growing divisions within the Council. With wage growth and core inflation likely to rise over the coming months, we expect more MPC …
5th July 2017
Last month’s batch of manufacturing PMIs in Emerging Europe suggest that growth in Central Europe remained robust at the end of Q2, while Turkey’s economy strengthened. Meanwhile, the sharper-than-expected fall in Turkish inflation last month, to 10.9% …
3rd July 2017
Strong growth in Central and Eastern Europe (CEE) in the first half of the year has been accompanied by further evidence that labour markets are tightening. Unemployment rates have fallen to record lows in the major economies and wage growth has picked …
30th June 2017
We have revised our forecasts for the Russian ruble and Turkish lira and we now expect a smaller rise in the ruble versus the dollar by the end of next year. We also now think future falls in the lira against the dollar will be smaller. … New forecasts …
29th June 2017
The hawkish tone of today’s post-meeting statement and press conference supports our non-consensus view that the first interest rate hike in the Czech Republic will come at August’s MPC meeting. Following that, we see the policy rate being raised to 1.00% …
June’s impressive batch of Economic Sentiment Indicators suggests that regional growth in Central and Eastern Europe remained above 4% y/y in Q2. The continued strong run of survey data supports our view that GDP growth across the region will be faster …
We suspect that economic growth in Emerging Europe is close to peaking in this cycle. Growth in Russia is likely to accelerate further over the course of 2017-18, but this will be more than offset by weakness in Turkey and a slowdown in Central and South …
28th June 2017
The recent fall in oil prices will keep EM inflation close to its current multi-year low for longer, but it won’t trigger a collapse in inflation. … Falling oil prices will keep inflation subdued for …
23rd June 2017
The Hungarian MPC’s extremely dovish post-meeting press statement provided further evidence that policymakers are as yet untroubled by growing signs of capacity constraints. Monetary policy is set to remain extremely loose over the rest of this year. But …
20th June 2017
May’s activity data from Russia were generally a bit stronger than expected and add to evidence that the economic recovery has continued to strengthen in Q2. … Russia Activity Data …
The batch of robust Polish activity data for May suggests that the economy is probably growing by around 4.0% y/y, in line with Q1’s outturn. … Poland Industrial Production & Retail Sales …
Relatively hawkish comments from the Russian central bank today appear to be aimed at dampening hopes that the pace of monetary easing might be stepped up. But while the policy rate is likely to be cut in small steps, low inflation should allow a lengthy …
16th June 2017
The Turkish central bank ended the recent tightening cycle today, but high inflation, strong GDP growth (this year at least), and hawkish comments from the MPC, mean that a shift towards interest rate cuts this year is unlikely. … Turkish MPC ends …
15th June 2017
Legislation passed by the US Senate to tighten the sanctions regime on Russia provides further reason to think that medium-term growth in Russia will be extremely weak. But the near-term economic repercussions are likely to be limited and, as things …
The much sharper-than-expected increase in Turkish GDP in Q1, of 5.0% y/y, has prompted us to revise up our GDP growth forecast for the year as a whole to 4.3%. At the margin, today’s figures make it more likely that the central bank will resist pressure …
12th June 2017
The press conference that followed today’s MPC meeting in Poland highlighted that some members of the Council are becoming more hawkish. While this supports our view that the policy interest rate will eventually be hiked by more than most expect over the …
7th June 2017
Russian headline inflation was unchanged in May, but the fall in core inflation to below the central bank’s target supports our view that the policy interest rate will be lowered again, from 9.25% to 9.00%, at next week’s MPC meeting. … Russia CPI …
6th June 2017
Turkish GDP figures due next week are likely to show that the recovery levelled off in the first quarter at around 3.5% y/y. But there are signs of a healthy rebalancing of the drivers of growth. … Turkey’s economic recovery levelling …
The combination of strong growth and rising core inflation has led some members of Poland’s MPC to strike a more hawkish tone in recent months. However, while this is consistent with our view that interest rates will ultimately be raised by more than the …
5th June 2017
The modest decline in Turkish inflation, to 11.7% y/y last month, supports our view that the MPC will end the recent monetary tightening cycle at next week’s meeting. … Turkey CPI …
