e2fda6f48f4beb7f2e9a16bde35b727c4d7cd8e0d73c422d49e7378ade652268;;[{"layout":"linklist","uid":26734,"publicationDate":"26 Nov 15:37","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2021_181821.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJH3YumI0qiwD5adt_m9vZ3k=&T=1&T=1","protectedFileLinkDe":"","protectedFileLinkIt":""},"title":"Chart of the Week - German households spared from surging gas and electricity bills...for now","product":"Chart of the Week","synopsis":"<ul class=\"ucrBullets\"><li> In its latest monthly report, the Bundesbank forecasts that Germany\u00b4s HICP inflation might reach just under 6% yoy in November (just above 5.5% yoy on the CPI gauge). The preliminary data will be published on Monday. The Bundesbank also expects the inflation rate to decline perceptibly over the course of 2022, although 'the bulk of the major increases in market prices for natural gas will probably only be passed on to consumers after the turn of the year'. <\/li><li> Our Chart of the Week shows that retail prices for natural gas and electricity have remained sticky in Germany despite skyrocketing gas prices in the market. Compared to before the pandemic (we take February 2020 as our reference), Dutch TTF gas prices have recorded a ten-fold rise, while prices for German consumers have barely increased. Germany stands out among its European peers, which have recorded much larger increases in either gas or electricity prices, or both.<\/li><li> At a country level, dynamics in retail prices for energy reflect a complex mix of demand and supply factors. They include the national energy mix, network costs, import diversification, costs for environmental protection, levels of taxation and weather conditions. Lately, government measures to ease the burden on households have played an increasingly important role, for example in countries such as France, Italy and Spain. German consumers have been spared from surging gas and electricity bills until now, largely due to comparatively sticky contractual agreements at the retail level. However, as current contracts expire, higher wholesale gas prices will be passed on to households to a more meaningful extent.<\/li><\/ul>","hash":"e2fda6f48f4beb7f2e9a16bde35b727c4d7cd8e0d73c422d49e7378ade652268","available":"0","settings":{"layout":"linklist","size":"default","showanalysts":"0","showcompanies":"0","showcountries":"0","showcurrencies":"0","synopsislength":"-1","synopsisexpand":"0","nodate":"0","nolinktitle":"0","notitle":"0","dateformat":"d M G:i","noproduct":"0","noflags":"0","shownav":"0","oldestedition":"","limit":"12"}},{"layout":"linklist","uid":26675,"publicationDate":"21 Nov 13:12","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2021_181739.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJAfMw9lWQklME712eYyiXzY=&T=1&T=1","protectedFileLinkDe":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2021_181739.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJAfMw9lWQklME712eYyiXzY=&T=1&T=1","protectedFileLinkIt":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2021_181739.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJAfMw9lWQklME712eYyiXzY=&T=1&T=1"},"title":"Chief Economist\u00b4s Comment - Sunday Wrap","product":"Chief Economist's Comment","synopsis":"<p><ul class=\"ucrBullets\"><li> I\u00b4ll provide a brief 'literature overview' of where the debate stands. This is mostly a US debate, partly because of the higher US inflation numbers and the greater uncertainty prevailing on that side of the Atlantic.<\/li><li>I\u00b4ll then summarize how I think the Fed and the ECB will react to the uncertainties they face when they meet in three weeks. I\u00b4ll argue that the Fed is likely to lose some of its nerve and accelerate the tightening, if not in December then in (very) early 2022. The ECB won\u00b4t. While complicated due to the politics of the PEPP, the ECB will attempt to keep financing conditions broadly unchanged during most of 2022. (Natural conclusion: EUR\/USD may well move another few big numbers lower.)<\/p><\/li><\/ul>"},{"layout":"linklist","uid":26674,"publicationDate":"19 Nov 16:16","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2021_181738.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJAfMw9lWQklMH_xkvDn10ac=&T=1&T=1","protectedFileLinkDe":"","protectedFileLinkIt":""},"title":"Chart of the Week - US: The uneven distribution of \u00b4excess savings\u00b4","product":"Chart of the Week","synopsis":"<ul class=\"ucrBullets\"><li> A key determinant of the economic outlook is to what extent households will be willing to rundown their 'excess savings' accumulated during the pandemic, to maintain personal spending growth despite the squeeze in real disposable income from high (albeit likely temporary) inflation. Our Chart of the Week shows that, in the US, the rise in household liquid assets (mostly bank deposits) since the onset of the pandemic has been concentrated among the top 80% by income, while the bottom 20% of the income distribution has seen no rise in liquid assets. At the aggregate level, household liquid assets are more than USD 3tn above their pre-pandemic trend, which is broadly similar to our USD 2.6tn (12% of GDP) top-down estimate of accumulated 'excess savings' during the pandemic ' in other words, most of the excess savings have been parked in bank accounts. <\/li><li> The uneven distribution of 'excess savings' in part reflects the fact that the impact of the pandemic has fallen hardest on those people who can least afford it, and in part that the fiscal stimulus was not particularly well targeted. It matters for the economic outlook because the marginal propensity to consume out of wealth is roughly 10 times higher for low-wealth households than it is for wealthy households. So while on aggregate the marginal propensity to consume out of financial wealth is typically estimated to be in the range of 5-10% in normal (non-recession) times, after adjusting for the uneven distribution of 'excess' liquid assets, the marginal propensity to consume out of these 'excess' liquid assets would be significantly lower.<\/li><li> But these are still not normal times. The willingness of households to rundown excess savings will depend on how much pent-up demand remains as a result of past restrictions and precautionary behavior. We judge there to be little or no pent-up demand remaining for goods in the US, but there is likely significant pent-up demand for services, although this is unlikely to be exhausted quickly, given the still high level of new COVID-19 cases and that consuming services takes time. The willingness to spend savings will also depend on consumer confidence regarding the outlook for jobs and incomes. In the US, consumer confidence has fallen, with the University of Michigan sentiment index falling in November to its lowest level since 2011. But retail sales values rose a strong 1.7% mom in October ' indeed, even after adjusting for higher prices, sales volumes likely grew robustly. This may mean that what people say (in surveys of consumer confidence) and do (in their spending decisions) are two different things, or consumer sentiment surveys maybe disproportionately reflecting the responses of lower-income households. And the finding that wealthier households have held their 'excess savings' accumulated during the pandemic largely in the form of liquid assets may imply that they intend to spend it sooner or later. To conclude, there is large uncertainty over how households will react over the coming months.<\/li><\/ul>"},{"layout":"linklist","uid":26673,"publicationDate":"19 Nov 15:19","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2021_181736.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJAfMw9lWQklMoSPNkKqCmn0=&T=1&T=1","protectedFileLinkDe":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2021_181753.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJAfMw9lWQklMTOTJ164uEG4=&T=1&T=1","protectedFileLinkIt":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2021_181756.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJAfMw9lWQklMsV_dO_IsiqI=&T=1&T=1"},"title":"Oil Update - Strategic petroleum reserves could curb oil price rise in the short term","product":"Oil Update","synopsis":"<ul class=\"ucrBullets\"><li> Oil market tightness persists following the OPEC+ decision to stick to its original production-cut tapering program and not accelerate the production of additional oil. <\/li><li> Since the market is about to shift from a situation of undersupply to one of oversupply, the release of oil from strategic reserves could provide a bridge between these two phases, mitigating oil price pressure until more supply is released by traditional producers.<\/li><li> To be effective, such a strategy requires a high degree of international coordination and needs to be limited in time given the emergency nature of these stockpiles. In order to bring Brent prices below USD 80\/bbl, consumer nations should commit around 300kb\/d for the next four months (that are equivalent to less than 1% of global strategic stockpiles). <\/li><\/ul>"},{"layout":"linklist","uid":26616,"publicationDate":"14 Nov 14:42","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2021_181669.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJGpOO6_2VW3LG7pgRAnVzYg=&T=1","protectedFileLinkDe":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2021_181669.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJGpOO6_2VW3LG7pgRAnVzYg=&T=1","protectedFileLinkIt":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2021_181669.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJGpOO6_2VW3LG7pgRAnVzYg=&T=1"},"title":"Chief Economist\u00b4s Comment - Sunday Wrap","product":"Chief Economist's Comment","synopsis":"<ul class=\"ucrBullets\"><li> Why the present disruptions and climate change issues are likely to accelerate the trend towards \u201chome-or-near sourcing\u201d.<\/li><\/ul><ul class=\"ucrBullets\"><li> Three examples of key sectors now moving in this direction.<\/li><\/ul><ul class=\"ucrBullets\"><li> Contours of the macro implications.<\/li><\/ul>"},{"layout":"linklist","uid":26591,"publicationDate":"10 Nov 10:58","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2021_181638.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJGpOO6_2VW3LoHAmMDHKCiU=&T=1&T=1","protectedFileLinkDe":"","protectedFileLinkIt":""},"title":"Chart of the Week - The bright side of supply shortages","product":"Chart of the Week","synopsis":"<ul class=\"ucrBullets\"><li> The German economy has been hit by supply shortages like no other country in the EU. According to a recent survey released by the EU Commission, nine out of ten German manufacturers stated that the lack of input goods dampened their activities. This compares to about 40% in France and less than 20% in Italy. <\/li><li> As can be seen in our Chart of the Week, the gap between new orders and activity in the German manufacturing sector has indeed widened to an unprecedented 20% compared to pre-pandemic levels. About one third of it stems from the auto industry alone which has been plagued by the lack of semiconductors. Given that some other sectors such as chemicals, machinery, etc. are, at least to some extent, dependent on car production, we think that about half of the gap has effectively been caused by the auto industry. <\/li><li> When the lack of semiconductors and other input goods is finally over is highly uncertain. However, what is likely is that it will then give the German economy an enormous boost. For illustration, let us assume that the supply shortages will ease in the second half of 2022 and German manufacturers are able to work off half of their backlog orders, i.e., a decrease of 10pp in the gap between new orders and production. This alone would lift real GDP by more than 2%. <\/li><\/ul>"},{"layout":"linklist","uid":26559,"publicationDate":"07 Nov 14:16","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2021_181603.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJGpOO6_2VW3LDBiB9rN5nOE=&T=1&T=1","protectedFileLinkDe":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2021_181603.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJGpOO6_2VW3LDBiB9rN5nOE=&T=1&T=1","protectedFileLinkIt":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2021_181603.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJGpOO6_2VW3LDBiB9rN5nOE=&T=1&T=1"},"title":"Chief Economist\u00b4s Comment - Sunday Wrap","product":"Chief Economist's Comment","synopsis":"<p><ul class=\"ucrBullets\"><li> The degree of trouble virtually all European central banks seem to have communicating their intended policy path from here ' which stands in stark contrast to the Fed\u00b4s clarity.<\/p><\/li><\/ul><p><ul class=\"ucrBullets\"><li><strong> The reality of COP-26: <\/strong> Vastly insufficient coordination of policy action, which suggests a highly uneven approach to climate change ' with potentially substantial impact on trade.<\/p><\/li><\/ul><p><ul class=\"ucrBullets\"><li> The striking difference between today\u00b4s political climate in the US and UK vs Continental Europe. It is bound to have an impact on the quality of policies.<\/p><\/li><\/ul>"},{"layout":"linklist","uid":26557,"publicationDate":"05 Nov 14:49","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2021_181601.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJGpOO6_2VW3LU4p3R9nSyKU=&T=1&T=1","protectedFileLinkDe":"","protectedFileLinkIt":""},"title":"Chart of the Week - What countries are most exposed to the EU\u00b4s carbon tariff?","product":"Chart of the Week","synopsis":"<ul class=\"ucrBullets\"><li> The UN\u00b4s COP26 climate-change conference in Glasgow continues until next Friday, with world leaders making pledges\u00a0aimed at keeping the average increase in the earth\u00b4s temperature from pre-industrial levels to less than 2\u00b0C. In a context where ambitions, policy tools and time horizons vary substantially across countries, the EU is at the forefront of international efforts to fight climate change. The European Green Deal set out a path to achieve the EU\u00b4s targets to reduce carbon emissions by 55% compared to 1990\u00b4s levels by 2030 and to become a climate-neutral continent by 2050. An integral part of this effort is the Carbon Border Adjustment Mechanism (CBAM), a tariff aimed at preventing carbon leakage, so to speak. Our Chart of the Week shows the exposure to such measures of the most geopolitically relevant trading partners of the EU-27.<\/li><li> <\/li><li> Without a CPBAM, the implementation of increasingly stringent measures to limit pollution within the EU might lead to carbon leakage elsewhere. For example, companies based in the EU might move carbon-intensive production abroad to benefit from lax standards elsewhere. Alternatively, European products might be replaced with more-carbon-intensive imports. Such carbon leakages would frustrate the EU\u00b4s efforts to curb emissions while reducing the competitiveness of European producers that comply with more stringent and costlier environmental regulations than some of their trading partners. The CBAM tries to avoid these scenarios by imposing a levy that will equalize the price of carbon emissions between domestic products and imports. Despite appearances, it should not be seen as a form of protectionism tout court but more as a way to ensure that a global externality is internalized in the same way internationally. The new measure, which will phase out existing free allowances in the EU\u00b4s Emissions Trading System, will start to be implemented in 2026, targeting imports of electricity, cement, aluminum, fertilizer and iron and steel products. <\/li><li> The chart shows that, in absolute terms, Russia and China will be the most exposed to such carbon tariffs. Respectively, around USD 10bn and USD 8bn of these countries\u00b4 exports to the EU-27 will be subject to the CBAM. In relative terms, Russia and Turkey are more exposed, as exports vulnerable to the CBAM represent around 6% of their total exports to the EU-27. The impact on European countries that import a high amount of CBAM-exposed products from outside the EU-27 will depend on whether, and to what extent, their suppliers will pass on the levy. <\/li><li> From a geopolitical point of view, the CBAM could strengthen the standard-setting role of the EU, but it could also be source of international tension, ultimately because it is still unclear whether it is entirely consistent with the current World Trade Organization rules. Moreover, given Russia\u00b4s and China\u00b4s questionable record in committing to serious climate targets, the CBAM might complicate already tense relations on a plethora of other issues. Equally, the CBAM levies might be leveraged by Turkey in negotiations concerning immigration. Going forward, trade and climate policies are likely to become increasingly intertwined, as demonstrated by the recent agreement between the US and the EU aimed at removing former US President Donald Trump\u00b4s tariffs on European steel and aluminum and at starting discussions on a global agreement concerning green production of these two metals. <\/li><\/ul>"},{"layout":"linklist","uid":26536,"publicationDate":"03 Nov 15:56","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2021_181578.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJPv8bKUyCBMmksEyFbxdDt0=&T=1&T=1","protectedFileLinkDe":"","protectedFileLinkIt":""},"title":"Economics Thinking - Elevated shipping costs to persist in 2022","product":"Economics Thinking","synopsis":"<ul class=\"ucrBullets\"><li> Shipping costs have increased massively in recent months due to a burgeoning demand for goods and constrained supply of container boxes and ships. <\/li><li> Given the centrality of seaborne trade to the functionality of global value chains, this container crisis is threatening the recovery from the pandemic by impairing production processes and fueling inflationary pressure.<\/li><li> The inelasticity of shipping supply in the short term means that only a normalization of demand can bring some relief to the industry. But we expect demand to remain elevated at least through 1H22 for several reasons: slow normalization in spending patterns due to COVID-19-related uncertainty, excess household savings, investment plans in the US and Europe, and inventory building.<\/li><li> As a result, shipping costs are likely to remain elevated well into 2022 while also gradually declining. <\/li><\/ul>"},{"layout":"linklist","uid":26514,"publicationDate":"31 Oct 12:51","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2021_181550.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJPv8bKUyCBMm2_6ImP1Yc64=&T=1&T=1","protectedFileLinkDe":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2021_181550.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJPv8bKUyCBMm2_6ImP1Yc64=&T=1&T=1","protectedFileLinkIt":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2021_181550.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJPv8bKUyCBMm2_6ImP1Yc64=&T=1&T=1"},"title":"Chief Economist\u00b4s Comment - Sunday Wrap","product":"Chief Economist's Comment","synopsis":"<p><ul class=\"ucrBullets\"><li> The increasing prospect of conflicts between the questionable strength of the recovery and the urge by policymakers to withdraw stimulus - partly due to excessive inflation fear.<\/p><\/li><\/ul><p><ul class=\"ucrBullets\"><li><strong> The outlook for German politics and policies: <\/strong> A brighter spot on the near horizon.<\/p><\/li><\/ul>"},{"layout":"linklist","uid":26485,"publicationDate":"27 Oct 14:25","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2021_181516.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJPv8bKUyCBMmqcnABCTgAlI=&T=1&T=1","protectedFileLinkDe":"","protectedFileLinkIt":""},"title":"Chart of the Week - No wage pressure from Germany supports ECB\u00b4s temporary inflation narrative","product":"Chart of the Week","synopsis":"<ul class=\"ucrBullets\"><li> While inflation hawks have priced in a rather high likelihood of a 10bp hike by the end of next year, our Chart of the Week shows that the temporary inflation narrative of the ECB is alive and kicking. Although companies in Germany, the single most important economy in the eurozone, have recently complained about the lack of personnel, there are no signs of second-round effects in the form of substantially higher wages. On a smoothed basis, the latest available wage data for July\/August 2021 provided by the Bundesbank flag a rise of less than 2% yoy.1) Without any smoothing, negotiated wages even only rose less than 1% yoy, its lowest increase in nearly 15 years!<\/li><li> The latest wage moderation in Germany is not a flash in the pan, in contrast. The recent wage settlements in the retail, wholesale and construction sectors also signal pay hikes of about 2% on average for next year. Since there are only two important collective bargaining rounds still pending by autumn 2022, moderate wage rises in the next 9-12 months on a macro level are basically cut and dried. The collective bargaining round in the public sector on a federal states and communal level (2.7mn employees, civil servants and pensioners), where an increase of 5% has been demanded, will be resumed next week. In Hessen, there was already an agreement about ten days ago with a rise of about, yes, 2% yoy. The negotiations in the chemical industry (0.6mn) might take place in spring of next year. The collective bargaining round in the metal & electro industry (3.8mn) will only start in 4Q22 and hence at a time when supply shortages may have become less severe and inflation rates have come down again.<\/li><li> The hike of the minimum wage by 25% to EUR 12 per hour in 2022, which has been envisaged by SPD, Greens and FDP in their coalition talks, is not a game changer but a one-off effect. Although it would apply to 8-10mn employees, or 20-25% of dependent employees (total employment excluding self-employed), single shifts in the wage level do not imply a rising trend in underlying inflation, as ECB chief economist Philip Lane recently put it. This would only be the case if the higher minimum wage would be used by labor unions later-on for shifting upward the whole wage curve. But even in this case, it would not be a story for next year but for 2023 and 2024. <\/li><li> For more on the ECB, BoE and the implications for markets, watch our latest UniCredit Research Webcast ' BoE and ECB on different trajectories. <\/li><\/ul>"},{"layout":"linklist","uid":26456,"publicationDate":"22 Oct 16:29","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2021_181481.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJGDwUj9cm6_LNfibJBlxTOc=&T=1&T=1","protectedFileLinkDe":"","protectedFileLinkIt":""},"title":"Chart of the Week - US wage increases not inflationary for now","product":"Chart of the Week","synopsis":"<ul class=\"ucrBullets\"><li> In the US, wages have risen sharply, reflecting strong labor demand and a shortage of available and qualified workers. It\u00b4s important to remember, however, that wage growth is only inflationary to the extent that it exceeds labor productivity growth. Indeed, our Chart of the Week shows that core CPI inflation is closely correlated with ' and lags by three quarters ' unit labor cost growth (ULC, which is approximately wage growth minus productivity growth). The economic recovery so far has been characterized by strong wage growth but also strong productivity growth (as evident in hours worked being well below pre-pandemic levels, while real GDP is above pre-pandemic levels), which is non-inflationary. Based on historical relationships, unit labor cost growth in 2Q21 (latest available) is consistent with core CPI inflation below 2% in 1Q22, although of course this only takes account of inflationary pressure from labor input costs, not materials and rents.<\/li><li> Ahead, as GDP growth slows and employment gains pick up (employment is still more than 5 million below pre-pandemic levels), productivity growth will slow and unit labor cost growth will probably rise as wage costs are unlikely to fully compensate for lower productivity growth. But this is all part of the reopening-induced volatility; instead, what really matters is the development of unit labor costs once volatility subsides and the underlying trends become clearer. Investment in capital goods has been unusually strong for this stage in the economic recovery, as the pandemic has induced shifts in working practices and a greater adoption of technology. If this proves persistent, it will tend to boost productivity growth and offset upward pressure from other factors. Other structural forces, such as globalization and demographics, will also determine the outlook for productivity growth and the longer-lasting forces acting on inflation. The outlook for non-labor costs, which tend to be volatile, will also be important given that they have largely been responsible for the currently elevated inflation numbers.<\/li><\/ul>"}]

fca5774f669803887558f1f8bf49f8ba6cbad35f9de48a9f1720f5619f212128;;[{"layout":"linklist","uid":26247,"publicationDate":"28 Sep 17:17","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/emergingmarkets_docs_2021_181230.ashx?EXT=pdf&KEY=l6KjPzSYBBGzROuioxedUNdVqq1wFeRoJRIvbGu4hUoKSAHz3HkdWA==&T=1&T=1","protectedFileLinkDe":"https:\/\/www.research.unicredit.eu\/DocsKey\/emergingmarkets_docs_2021_181455.ashx?EXT=pdf&KEY=l6KjPzSYBBGzROuioxedUNdVqq1wFeRojR0ndJv3ku_Ko7-EPYhaBw==&T=1&T=1","protectedFileLinkIt":""},"title":"CEE Quarterly - Time for policy normalization (4Q21)","product":"CEE Quarterly","synopsis":"<p><ul class=\"ucrBullets\"><li> We expect economies in EU-CEE and in the Western Balkans, to grow by around 6% in 2021 and 4.6% in 2022. Turkey\u00b4s economy could grow by 9.7% in 2021 and 5.5% in 2022. In Russia, GDP growth could slow from 4% in 2021 to 2.4% in 2022.<\/p><\/li><\/ul><p><ul class=\"ucrBullets\"><li> Before the end of 2022, output gaps could turn positive in Hungary, Poland, Romania, Russia, Serbia, Slovenia and Turkey.<\/p><\/li><\/ul><p><ul class=\"ucrBullets\"><li> Pent-up demand is driving the recovery in 2021, helped by savings accumulated in 2020, and rising wages and employment. Exports are contributing to growth owing to strong demand for cars, a bumper harvest, returning foreign tourists and, in Turkey, to competitive gains amid currency depreciation.<\/p><\/li><\/ul><p><ul class=\"ucrBullets\"><li> In 2022, investment could contribute more to growth, helped in EU-CEE by disbursements from the EU\u00b4s Recovery and Resilience Facility (RRF), in Russia by spending from National Wealth Fund and in Turkey by looser financial conditions.<\/p><\/li><\/ul><p><ul class=\"ucrBullets\"><li> Public policies are a risk to medium-term growth due to populist spending triggering a limited fiscal adjustment, a backlash against green energy, poor implementation of structural reforms and nationalist agendas affecting economic goals.<\/p><\/li><\/ul><p><ul class=\"ucrBullets\"><li> Supply-chain bottlenecks, rising energy prices and buoyant consumer demand could keep inflation outside target ranges for longer than central banks currently expect. Further monetary tightening is needed to ensure price stability.<\/p><\/li><\/ul><p><ul class=\"ucrBullets\"><li> Due to structurally tight labor-market conditions, we expect inflation in EU-CEE to diverge from that in the eurozone in the coming years, forcing EU-CEE central banks to tighten further. The CBR might need to keep the real interest rate positive due to structural rigidities. The CBRT gave up its inflation mandate, with potential consequences on financial stability.<\/p><\/li><\/ul>","hash":"fca5774f669803887558f1f8bf49f8ba6cbad35f9de48a9f1720f5619f212128","available":"0","settings":{"layout":"linklist","size":"default","showanalysts":"-1","showcompanies":"-1","synopsislength":"-1","showcountries":"-1","showcurrencies":"-1","synopsisexpand":"0","nodate":"0","notitle":"0","dateformat":"d M G:i","nolinktitle":"0","noproduct":"0","noflags":"0","shownav":"0","oldestedition":"","limit":"1"}}]