Russia Watch: Violent conflict in Ukraine ... default delayed for now — why?

Gunter DEUBER May 25, 2022 07:30 CEST

Further hardening rather than easing signals dominate in the Ukraine war. In the economic sphere Russia is still trying not (yet) to be forced into a (technical) default (for corporate bonds technical defaults on external debts are mounting) — preserving a minimum degree of economic rationality. Meanwhile, an ultra-strong RUB can be sold as a policy success domestically. We remain on alert regarding further (Western) steps of "economic warfare" ahead (e.g. asset seizures, enforced external sovereign default).

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Wide Angle Shot: Stumbling blocks for (European) billions of EUR for Ukraine

Gunter DEUBER May 24, 2022 10:19 CEST

Reconstruction and preparation of Ukraine for integration into the EU economy will be a mammoth (financial) task. In addition to public funds, hundred(s) of billions of private capital will be needed. This aspect seems underexposed in the current debate. On a positive note, there is also the chance that capital from CE/SEE can participate in the transformation of Ukraine.

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Belarus Watch: GDP keeps falling

Dorota STRAUCH May 19, 2022 14:15 CEST

In the four months of 2022, the scale of GDP decrease extended to 2.1% yoy. The usual key GDP supporters such as industrial output and exports dropped, while also the retail sector recorded a significantly reduced growth rate. In the rest of 2022, GDP decline will extend further.

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Belarus Insights: Foreign trade under extreme sanctions pressure

Dorota STRAUCH May 19, 2022 13:50 CEST

The relative stabilization since March, 22 was reflected in a monthly inflation slowdown, a reduction of the planned oil purchases, and ongoing services exports growth. It allows us to be less conservative in our estimates of the key rate, budget deficit and foreign trade deficit

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Russia Watch: Slower price growth allows for further key rate cuts

Gregory CHEPKOV May 17, 2022 14:32 CEST

In April, inflation added 17.8% yoy (vs 16.7% yoy in March). After the first week of April, the inflation pace has moderated remaining at ~0.03% dod, which pushed the CBR to cut the key rate by 300bp at the end of April with further easing likely.

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Hungary Watch: Strong start – but be prepared for a poor finish

Zoltán TÖRÖK May 17, 2022 11:14 CEST

Despite the strong start of the year, the Hungarian economy is facing multiple challenges pointing towards a fast and drastic deceleration of economic growth in the rest of the year. The negative factors include the deterioration of the terms of trade, the hefty fiscal consolidation need, the ongoing global supply chain problems, the freezing of EU funds and even a potential energy crisis. We keep our GDP forecast for 2022 unchanged at 2.5% as a baseline scenario.

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Belarus Watch: Annual inflation remains on upward trend

Casper ENGELEN May 16, 2022 10:10 CEST

In April 2022 inflation increased further in Belarus and reached 16.8% yoy. However, April's monthly price growth slowed down considerably – 1.6% mom vs. 6.1% in Mar. Food was vanguarding price growth, rising by 3.9% mom and 19% yoy, whereas prices for services dropped by 1.3 mom

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