Serbia Watch: Net exports and investments supported 0.7% yoy GDP growth in Q1

Ljiljana GRUBIC May 31, 2023 13:46 CEST

Less energy consumption, falling energy prices and infrastructural investments supported GDP growth of 0.7% yoy in Q1 after 0.5% yoy in Q4 2022. We maintain the GDP forecast at 1.9% yoy for the entire 2023.

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Croatia Watch: Risks are turning to the upside

Zrinka ZIVKOVIC-MATIJEVIC May 30, 2023 11:09 CEST

The Q1 GDP results brought both annual and quarterly growth. With the economic environment proving to be more resilient, the avoided recession in EA and investments that are yet to see a stronger flywheel from EU money, risks to our forecasts are turning to the upside.

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Wide Angle Shot: €@Croatia — 360-degree view economics, banks & capital markets

Zrinka ZIVKOVIC-MATIJEVIC May 30, 2023 10:40 CEST

Out of a difficult macro-financial decade (the 2010s) Croatia emerged stronger, as proven in recent crises. Croatia stayed the minimum time inside ERM II and adopted the EUR 1 Jan 2023. Euroization has been traditionally high, and HRK abandonment is easy to bear. Pros of the common currency, including cheaper (re-)financing costs (public & private sector), outweigh cons. Now the door to European capital markets opens up. We expect local banks and non-financials to make greater use of Eurobond markets. Slovakia can serve as a blueprint here. On top, "country risk" appetite re-emerges, also regarding Croatian exposures at Western banks. The latter is crucial as a lot of investments will be needed for real convergence. Finally, we see no evidence that the euro introduction excessively fueled inflation.

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US Debt Ceiling: Done Deal (?)

Markus TSCHAPECK May 30, 2023 08:36 CEST

An agreement on the urgently needed raise of the debt ceiling in the US appears to be on the horizon. President Biden and the Republican chief negotiator Kevin McCarthy agreed on a compromise solution. However, this must be approved by Congress in the near future, as latest estimates point to a default as of June 5.

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Euro area Watch: Better than feared - weaker than hoped for

Gottfried STEINDL May 17, 2023 18:06 CEST

In the euro area, the preliminary result for GDP in the winter half-year 2022/23 was better than feared just a few months ago. However, this does little to change our assessment for the further course of economic activity. The underlying momentum is likely to turn out to be lower this year and next than some are hoping for. However, we are taking the available data as an opportunity to adjust our GDP forecast for 2023 and 2024.

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CE Watch: Q1 GDP exceeds expectations

Dorota STRAUCH May 16, 2023 16:26 CEST

Today's Q1 GDP releases showed that while the recession in Hungary continued at the start of 2023, it was less pronounced than expected. Meanwhile, in Poland, the result surprised even more to the upside showing a technical recession has been avoided after all.

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Czechia Watch: Food prices and seasonal factors drove unexpected CPI decline

David VAGENKNECHT May 11, 2023 13:51 CEST

Czech CPI was unexpectedly low in April driven mainly by lower food prices and other seasonal factors. Else, underlying price pressures still appear as broad even though gradual easing is intact. We evaluate risks to our 11.3% forecast as balanced, with no more hikes in sight.

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