Filtered by Subscriptions: Emerging Europe Economics Use setting Emerging Europe Economics
Sentiment edges lower, but still points to recovery The European Commission's Economic Sentiment Indicators for Central and Eastern Europe (CEE) generally fell in February, but still point to regional GDP growth strengthening in Q1. Economic sentiment …
28th February 2024
Step up in pace of easing will soon be reversed The decision by the Hungarian central bank (MNB) to step up the pace of its easing cycle today, with a 100bp interest rate cut, will probably be followed by further large interest rate cuts over the next few …
27th February 2024
BoI stands pat as inflation risks remain strong Israel’s central bank opted to leave interest rates on hold at 4.50% today – in contrast to the consensus view for a cut – and the communications continued to emphasise upside inflation risks. Policymakers …
26th February 2024
Wage data still offering reasons for caution The latest wage data released out of Poland and Hungary this week showed that labour cost pressures have remained very strong in parts of Central and Eastern Europe (CEE). So despite another slew of …
23rd February 2024
New governor committed to the tight policy stance The hawkish statement accompanying the Turkish central bank’s decision to leave interest rates unchanged at 45.00% today supports our view that a shift to monetary easing remains some way off and we still …
22nd February 2024
Domestic demand to drive the recovery Poland’s activity data for January suggest that the reacceleration in wage growth at the start of this year supported domestic demand, while the export-orientated industrial sector struggled. We think that a further …
Deep contraction highlights the extent of the conflict damage The 19.4% q/q annualised contraction in Israeli GDP in Q4 was much worse than had been expected and highlights the extent of the hit from the Hamas attacks and the war in Gaza. While a recovery …
19th February 2024
Ratings downgrade highlights realities in Israel The decision by Moody’s to deliver Israel’s first credit rating downgrade in its history late last week is a warning sign to policymakers that the strength of the public finances should not be taken for …
16th February 2024
Tightening cycle comes to a close, but rates to stay high Russia’s central bank (CBR) left its policy rate on hold at 16.00% as expected today and we think that inflation pressures will prevent it from cutting interest rates for most of this year. Today’s …
The Czech economy has had the weakest performance of any EU country since the pandemic, and we think that growth will disappoint expectations again in 2024. This will keep inflation contained and put pressure on the central bank to loosen monetary …
Plunge in inflation seals the deal on a larger rate cut We’d expected a large fall in Czech inflation in January, but the collapse from 6.9% y/y in December to just 2.3% y/y shows that price pressures are dissipating even more quickly than we’d …
15th February 2024
Inflation pressures unlikely to prompt another hike The stabilisation in Russian inflation in January, at 7.4% y/y, should provide cover for the central bank to leave its policy rate unchanged at 16.00% at its meeting on Friday, rather than continue the …
14th February 2024
At a standstill at the end of 2023 Q4 GDP figures out of Central and Eastern Europe (CEE) showed that the region ended last year on a weak note, but the outlook for 2024 looks brighter. While soft external demand is likely to remain a drag on growth over …
Above-target inflation to keep NBR in a hawkish mood The National Bank of Romania (NBR) left its policy rate on hold at 7.00% again today and, while interest rate cuts are likely to start around mid-year, we think that monetary easing will be less …
13th February 2024
Is euro adoption the path forward for Czechia? The Czech government’s debate on adopting the euro reignited at the start of this year and took another step forward this week, although we think that the potential benefits of joining the single currency …
9th February 2024
The surge in labour costs across Central and Eastern Europe (CEE) in recent years has led to a sharp loss of competitiveness and raised concern about the impact on the region. We remain relatively optimistic on the medium-term outlook and still think that …
CNB steps up its easing cycle The Czech National Bank (CNB) accelerated the pace of its monetary easing cycle today with a 50bp interest rate cut, to 6.25%, and the post-meeting communications support our view that an even larger interest rate cut is on …
8th February 2024
Governor Karahan committed to tight policy, rate cuts some way off The communications from new Turkish central bank governor Karahan at today’s Inflation Report briefing will have helped to reassure investors that the change at the helm of the central …
Economy rebounds strongly following war and sanctions shock Russia’s economy expanded by 3.6% over 2023 as a whole, marking a sharp rebound from a contraction of just 1.2% in 2022 (revised from 2.1%). The activity data for December suggest that the …
7th February 2024
Rates on hold, March rate cut is in the balance The National Bank of Poland (NBP) left interest rates on hold again today, at 5.75%, and we think that an interest rate cut at the next meeting in March looks finely balanced. Our current assumption is that …
Headline inflation picks up, all eyes on new governor Headline inflation edged up slightly in Turkey to 64.9% y/y in January, and the m/m figure – a 6.7% increase on the back of a large minimum wage hike – looked even worse. The figures highlight the …
5th February 2024
EM Drop-In : We'll be discussing EM policy easing, debt risks and the outlook for bond yields in our monthly EM drop-in on Thursday 8th February . Register here . Ukraine aid deals ends a week of uncertainty Hungary dropped its veto against the EU’s …
2nd February 2024
CEE industry still struggling, input prices diverge in Turkey and Russia The manufacturing PMIs out of Central and Eastern Europe (CEE) for January remained soft and haven’t changed the broad picture that the region’s industrial sectors continue to …
1st February 2024
Inflation continued to fall sharply across Central and Eastern Europe at the end of 2023, but we think that the disinflation process is entering a more difficult phase in 2024 as demand is beginning to recover. While monetary easing cycles are likely to …
31st January 2024
Soft annual figure suggests weak end to 2023 The weaker-than-expected 0.2% expansion in Polish GDP over 2023 as a whole suggests that the economy struggled at the end of the year. We think this weakness will prove temporary and that activity should …
MNB errs on the side of caution The Hungarian central bank’s (MNB’s) communications following its meeting today confirm that the decision not to accelerate the pace of its easing cycle was due to the recent ratcheting up of tensions between the government …
30th January 2024
This page has been updated with additional analysis since first publication. Regional recovery continues The European Commission's Economic Sentiment Indicators for Central and Eastern Europe (CEE) were a mixed bag in January, but our regional measure …
The start of a slow recovery The meagre 0.2% q/q expansion in Czech GDP in Q4 confirms that the economy contracted over 2023 as a whole, and we think that this is likely to be followed by tepid growth this year. We maintain our below consensus GDP …
Were the EU to block Hungary’s access to funds (if it vetoes financing for Ukraine at this week’s summit), as reports on Sunday suggested, this would probably have a smaller direct impact on Hungary’s economy and financial markets than most would think. …
29th January 2024
Hungary skating on thin ice with new rate proposal The proposal by the Hungarian government this week to change the reference rate used to price bank loans risks undermining the central bank’s (MNB’s) independence and presents a further upside threat to …
26th January 2024
Turkey’s policy U-turn underway since the election last year has been relatively encouraging so far and policymakers’ commitment to orthodoxy has given us reason for optimism. While the scale of the challenge of achieving macroeconomic stability is …
25th January 2024
This is a special Global Economics Chart Pack that provides clients with key analysis to make sense of the macro and market impact of the disruptions to maritime shipping. The charts in this document come from our brand-new shipping dashboard , which …
Hiking cycle at an end, rates to stay high The 250bp interest rate hike from Turkey’s central bank (CBRT) today, to 45.00%, marks an end to its tightening cycle. Encouragingly, the communications were relatively hawkish and suggest that policymakers …
This page has been updated with additional analysis since first publication. Recovery continues in Q4 Poland’s retail sales data for December suggest that consumer spending weakened at the end of last year, although the industrial sector held up better …
22nd January 2024
Revising down our Hungary interest rate forecast In Hungary, dovish comments from the central bank (MNB) deputy governor this week and recent softer-than-expected inflation data have prompted us to revise down our interest rate forecast. We had flagged …
19th January 2024
The fading energy crisis and the falls in inflation and interest rates generated a more positive mood about the economic outlook at Euromoney’s Central and Eastern European (CEE) forum in Vienna this week compared with last year. But ongoing labour …
18th January 2024
Fall in inflation won’t be sustained The small fall in Russian inflation to 7.4% y/y in December is likely to be temporary, and we still think that the central bank’s tightening cycle has further to run. We expect a 100bp rate hike (to 17.00%) next month. …
12th January 2024
Inflation data surprise to the downside The softer-than-expected December inflation data released across Central and Eastern Europe (CEE) this week suggest that further interest rate cuts will be delivered across the region over the coming months and, in …
NBR won’t cut rates as far as most expect in 2024 The National Bank of Romania (NBR) left its policy rate unchanged at 7.00% today and, although a monetary easing cycle seems to be drawing nearer, we think that interest rates are unlikely to be cut as far …
Communications from the governor of the National Bank of Poland (NBP) today suggest to us that policymakers could cut interest rates again at the central bank’s March meeting. But we think core inflation will remain above the central bank’s target until …
10th January 2024
NBP has limited scope for rate cuts in 2024 The National Bank of Poland (NBP) left interest rates on hold again today, at 5.75%, and we continue to think that the scope for monetary loosening ahead is relatively limited. While the consensus view in recent …
9th January 2024
This page has been updated with additional analysis since first publication. Regional sentiment continues to recover The European Commission's Economic Sentiment Indicators for Central and Eastern Europe (CEE) generally continued to rise in December and …
8th January 2024
BoI starts easing cycle, but uncertainty remains high Israel’s central bank started its monetary easing cycle this week with a 25bp interest rate cut – a move that came a bit sooner than we’d expected. But inflation risks are greater than most anticipate, …
5th January 2024
Headline inflation picks up, but core inflation losing momentum The rise in Turkish inflation to 64.8% y/y in December was broadly in line with expectations and the breakdown provided some signs that underlying price pressures continue to soften. We think …
3rd January 2024
The Erdogan government’s turn back to macroeconomic orthodoxy is showing early positive signs: inflation pressures have eased; the current account deficit has narrowed; and foreign investment has picked up. But is this the latest in a string of false …
2nd January 2024
This page has been updated with additional analysis since first publication. Further weakness in CEE, but Russia continues to overheat The manufacturing PMIs out of Central and Eastern Europe (CEE) and Turkey for December suggest that industrial sectors …
Fiscal rules no game changer for CEE public finances EU finance ministers agreed on a new set of fiscal rules this week, but this doesn’t change our view that concerns about public debt dynamics will grow in parts of Central and Eastern Europe (CEE) over …
22nd December 2023
This page has been updated with additional analysis from the post-meeting press statement and press conference. CNB kicks off its easing cycle The Czech National Bank (CNB) maintained a hawkish tone as it started its easing cycle today, but we still think …
21st December 2023
Leaving the door open for one more hike Turkey’s central bank (CBRT) delivered a 250bp interest rate hike, to 42.50%, at today’s meeting and didn’t close the door on the tightening cycle. We’ve now pencilled in one more 250bp hike at the next meeting in …
This page has been updated with additional analysis since first publication. Recovery stalls in November Poland’s activity data for November suggest that the economic recovery stalled last month, but we think that this is only a temporary blip. We still …
