Czechia Watch: CNB delivered expected rate stability

Vratislav ZAMIS September 30, 2022 11:04 CEST

Same as at its August meeting, the CNB bank board voted to keep rates stable. The decision was in line with analysts' unanimous expectations. There was also no change in the FX interventions strategy; the CNB will continue to prevent excessive FX fluctuations. At the press conference, Governor Ales Michl was brief, but some of his answers were surprisingly hawkish.

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Hungary Watch: Liquidity tightening replaces interest rate hikes

Gergely PÁLFFY September 28, 2022 13:12 CEST

Yesterday, the MNB raised rates by 125 basispoints (against the market consensus of 100 basispoints), while indicating that the interest rate hike cycle has come to an end, and that any further tightening will come through reducing liquidity and facilitating monetary transmission. Our previous scenario was for rate hikes to peak at 13.75% in Q1 2023, which we are now revising, although we maintain our forecast for further increases in BUBOR rates.

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Kosovo Watch: Growth slows amid ongoing geopolitical turmoil

Fjorent RRUSHI September 23, 2022 09:59 CEST

All in all, low economic growth in Q2 2022 is another confirmation of the impact that the war in Ukraine, through elevated inflation and ongoing energy crisis, will have on the economy not only in the second part of the year but also in 2023. Therefore, due to the worsening market conditions and increased geopolitical risks in Eastern Europe we have put under revision Kosovo's GDP growth of 2022 with a possible downgrade compared to our actual forecast of 3.7% yoy.

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Russia/Ukraine Watch: More risks, volatility & sanctions (?) on the table now!

Gunter DEUBER September 23, 2022 07:41 CEST

Recent escalating dynamics in the context of the Ukraine war add to short-term risks and volatility in various political, sanction, economic and market dimensions (incl. local markets and banking sectors). Noticeable moves are mostly driven by residents. However, mid- to long-term a scenario of a "frozen" conflict (Western sanctions being entrenched) gains a bit of likelihood for later in 2023.

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Russia Watch: recession partly shifts to 2023

Gregory CHEPKOV September 16, 2022 11:27 CEST

According to Rosstat, Russia’s GDP shrank 4.1% yoy in Q2 2022 (0.4% in H1 cumulatively). The recession appears to be more L-shaped in comparison to earlier expectations and the shock is likely to shift more into 2023.

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Wide Angle Shot: Kosovo — Putin's ghost hovers over the Balkans

Fjorent RRUSHI September 13, 2022 07:11 CEST

The fear of Kosovar leadership is that giving North Kosovo full autonomy could be possibly associated with the emergence of another “Republika Srpska” or even a new “Donbas” in Kosovo. In other words, Kosovar Albanians perceive it as a potential Trojan horse, mindful of the case of “Republika Srpska” in Bosnia. This would make the state functioning of the youngest country in Europe very difficult as a history of events and frictions in Bosnia indicate.

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Serbia Watch: Drought keeps prices elevated in August at 13.2%

Ljiljana GRUBIC September 12, 2022 14:42 CEST

Retail prices kept upward dynamics during summer due to drought and high production costs. In August, CPI grew by 1.2% mom after July’s 1.0% mom growth supported by the food spike. Annualized print jumped to 13.2% after 12.8% in July.

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