Hungary Watch: MNB moves to orthodoxy

Zoltán TÖRÖK June 28, 2022 17:58 CEST

The MNB increased key interest rate by 185bp to 7.75% and gives up its perplexing double-rate system. Rate hike cycle lasts until the rise of the monthly inflation reading does not stop. In our view this means 9.75% terminal rate in October. HUF nervousness calmed down and EURHUF moved below 400, but it is not a game-changer for the HUF.

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Romania Watch: Public deficit was low until May, but to increase in H2

Nicolae COVRIG June 27, 2022 14:01 CEST

Public budget deficit during January-May was low, totaling only 4.8% of GDP according to our estimates. Public revenues growth was very fast, being also boosted by inflation. Still, we expect the public deficit to increase in H2 2022 and to reach 6.5% of GDP this year.

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Belarus Watch: GDP rolling downhill

Dorota STRAUCH June 27, 2022 09:46 CEST

The rate of economic contraction is gaining momentum. GDP dropped by 3.4% yoy in the first five months of 2022. Domestic consumption and IT sector remained the only supporters of GDP, while the industrial output fell even faster than GDP by 4.2% yoy.

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Belarus Watch: Inflation slowed down in May 2022

Casper ENGELEN June 24, 2022 15:56 CEST

In May 2022, inflation slowed to 0.7% mom, mainly due to a noticeable decrease in seasonal price growth. Food and non-food price rises decelerated and flattened out. Current administrative price control and RU energy supply allow for a slight improvement of the inflation outlook.

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Czechia Watch: CNB raised rates again, but another hike is unlikely

Vratislav ZAMIS June 24, 2022 11:01 CEST

The CNB decided on Wednesday to raise rates by another 125 basis points to 7.00%. From July, the forces in the Board will turn more in favour of the doves, and we expect rates to remain stable. However, a cosmetic August hike cannot be completely ruled out.

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Wide Angle Shot: ECB - Lost in Market Steering?

Gunter DEUBER June 21, 2022 16:49 CEST

The ECB now wants to limit "unjustified" yield/spread breakouts. Euro government bond markets had previously come under pressure in light of global market tensions and upcoming first ECB rate hikes. We see ECB in a delicate situation in the short and medium term: there is no unity within the institution, decision-making is slow and comprehensive market control is treading on thin ice. Especially since we currently do not see any drastic "fundamental distortions" of euro country spreads in the broader capital market context.

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Kosovo Watch: First signs of the economy slowing down

Fjorent RRUSHI June 20, 2022 12:30 CEST

In Q1 2022 the annual growth of GDP was at 4.9%, below our forecast of 5.4%, negatively impacted by increased inflationary pressures and heightened uncertainty. The latest government interventions to help households keep the spending power, the increase in the minimum wage and unrelenting price pressures deriving from the dire international situation will keep inflation at double-digit levels in 2022, with our forecast at 10.4% on average, versus the initial estimate of 8%.

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