e2fda6f48f4beb7f2e9a16bde35b727c4d7cd8e0d73c422d49e7378ade652268;;[{"layout":"linklist","uid":25522,"publicationDate":"13 Jun 15:33","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2021_180396.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJO-OjE-wCTf-mTPPqXyadRs=&T=1&T=1","protectedFileLinkDe":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2021_180396.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJO-OjE-wCTf-mTPPqXyadRs=&T=1&T=1","protectedFileLinkIt":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2021_180396.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJO-OjE-wCTf-mTPPqXyadRs=&T=1&T=1"},"title":"Chief Economist\u00b4s Comment - Sunday Wrap","product":"Chief Economist's Comment","synopsis":"<p><ul class=\"ucrBullets\"><li> Multilateralism is back, but it is easy to see the fragilities right there beneath the surface.<\/p><\/li><\/ul><p><ul class=\"ucrBullets\"><li> To address the \u201cinternal challenges\u201d \u2013 growth and income distribution - G7 agreed to keep pushing with fiscal expansion.<\/p><\/li><\/ul><p><ul class=\"ucrBullets\"><li> To address the \u201cexternal challenges\u201d \u2013 primarily China\u2019s global diplomacy to win friends \u2013 G7 agreed to donate massive amount of vaccine and to help finance climate change policies in emerging markets.<\/p><\/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":25520,"publicationDate":"11 Jun 14:21","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2021_180394.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJO-OjE-wCTf-EtMAmOQps0o=&T=1&T=1","protectedFileLinkDe":"","protectedFileLinkIt":""},"title":"Chart of the Week - This is not the picture of a persistent rise in US inflation","product":"Chart of the Week","synopsis":""},{"layout":"linklist","uid":25459,"publicationDate":"06 Jun 14:22","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2021_180324.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJO-OjE-wCTf-08Dw41YsbrM=&T=1&T=1","protectedFileLinkDe":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2021_180324.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJO-OjE-wCTf-08Dw41YsbrM=&T=1&T=1","protectedFileLinkIt":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2021_180324.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJO-OjE-wCTf-08Dw41YsbrM=&T=1&T=1"},"title":"Chief Economist\u00b4s Comment - Sunday Wrap","product":"Chief Economist's Comment","synopsis":"<ul class=\"ucrBullets\"><li> I\u00b4ll first lay out the land of where we are coming from and identify the key characteristics of the post-pandemic world in which the ECB needs to operate.<\/li><li> I\u00b4ll then outline how to recreate a credible inflation targeting regime.<\/li><li> Finally, and related, I\u00b4ll discuss how to move away from the key distortions, which presently compromise the ECB\u00b4s effectiveness.<\/li><\/ul>"},{"layout":"linklist","uid":25458,"publicationDate":"04 Jun 16:45","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2021_180323.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJO-OjE-wCTf--i8jsWcYMe8=&T=1&T=1","protectedFileLinkDe":"","protectedFileLinkIt":""},"title":"Chart of the Week - Italy: Household spending will be key to recovering pre-crisis GDP levels","product":"Chart of the Week","synopsis":"<ul class=\"ucrBullets\"><li> This week, Istat published its updated estimate and details of Italy\u00b4s 1Q21 GDP. The good news is that GDP growth was revised upwards to 0.1% qoq, compared to -0.4% in the flash estimate. At the end of 1Q21, real GDP was 6.4% below its pre-pandemic level in 4Q19, with Italy between France (-4.7%) and Germany (-5.0%) on the one hand and Spain (-9.4%) on the other.<\/li><li> Our Chart of the Week breaks down the GDP loss from the pre-crisis peaks in the four largest eurozone countries1. The reduction of economic activity in Italy can mainly be explained by a collapse in private consumption, which declined much more than overall GDP. A significant contraction in private consumption is a common feature of this crisis and it is related to the fact that household spending on services was significantly hampered by COVID-19-related restrictions, voluntary social distancing and precautionary behavior. The relatively smaller negative contribution of private consumption to GDP loss in France, compared to Italy, can be explained by the fact that, despite the savings rate significantly exceeding that of the pre-crisis period in both countries, French households benefitted from an improvement in their gross disposable income, which contracted in Italy, albeit moderately. Household disposable income fell much more in Spain, but here households reduced their savings rate in both 3Q20 and 4Q20, somewhat cushioning the decline in their spending. <\/li><li> The chart also shows that real GDP in Italy was dragged down by a negative contribution from net exports. This was mainly due to a decline in exports of services as a result of the restrictions on tourism. Exports of goods held up relatively well. However, given the comparatively larger weighting of exports of goods in total Italian exports (in volume terms), the impact of the fall in exports of services was much lower than, for example, in Spain, which has one of the highest weightings of exports of services among the four countries. On the other hand, investments recovered quickly from the impact of the COVID-19 crisis, with Italy in particular (but also Germany) benefitting from good performance of construction investment, as opposed to France and Spain.<\/li><li> Our key takeaway is that the recovery of pre-crisis GDP levels will largely hinge on the speed with which households boost their spending now that restrictions have gradually been eased thanks to the progress of the vaccination campaign and the warmer weather. In Italy, the strong improvement in consumer confidence in May ' the indicator is almost back to its February 2020 level ' is surely an encouraging sign and might prompt households to start reducing some of their accumulated savings. However, as fiscal support for incomes will gradually fade over the coming quarters, a recovery in household income will greatly depend on a recovery in labor compensation and thus on a recovery in employment.1 Others' captures the contribution of public consumption and inventories.<\/li><\/ul>"},{"layout":"linklist","uid":25409,"publicationDate":"30 May 12:31","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2021_180266.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJJlwGHsLXJWz5euUXfMdH6k=&T=1&T=1","protectedFileLinkDe":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2021_180266.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJJlwGHsLXJWz5euUXfMdH6k=&T=1&T=1","protectedFileLinkIt":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2021_180266.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJJlwGHsLXJWz5euUXfMdH6k=&T=1&T=1"},"title":"Chief Economist\u00b4s Comment - Sunday Wrap","product":"Chief Economist's Comment","synopsis":"<ul class=\"ucrBullets\"><li> First, I want to pay my respect and appreciation to Henrik Enderlein of the Hertie School of Governance and the Jacques Delors Centre, who passed away earlier today.<\/li><li> Second, and related, the importance of European unity ' for the good of us Europeans and, frankly, for the world ' was further emphasized this past week as geo-political tensions escalated following the hijacking of the Ryanair plane by Belarus.<\/li><li> Third, and onto better news, this past week, the latest Eurobarometer showed a further increase - to 80% - in the support for the euro among eurozone citizens.<\/li><li> Fourth, another highly topical issue for the sustainability of the European project is the Italian reform agenda.<\/li><li> Finally, please allow me to introduce you to our new monthly webinar in which we discuss ' in 15 short minutes - our expectations for the main events of the month ahead, and their implications for markets.<\/li><\/ul>"},{"layout":"linklist","uid":25408,"publicationDate":"28 May 15:28","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2021_180265.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJJlwGHsLXJWzm0i1QBb_AYc=&T=1&T=1","protectedFileLinkDe":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2021_180276.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJJlwGHsLXJWzLICujB45L7M=&T=1&T=1","protectedFileLinkIt":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2021_180281.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJJlwGHsLXJWz38fE0CFn-q4=&T=1&T=1"},"title":"Oil Update - The green transition and the new oil price regime","product":"Oil Update","synopsis":"<ul class=\"ucrBullets\"><li> The green transition will lead to a structural decline in oil demand. Uncertainty has more to do with when the peak will come and how fast the drop in demand will be. <\/li><li> Peak demand will intensify competition among producers, possibly opening the door to a new oil price regime. Based on the current cost structure of oil producers, prices would struggle to go above USD 50\/bbl. <\/li><li> However, among oil producers, the winners and losers of the green revolution will not be determined only by their cost effectiveness. What will play a role in the production race will be the amount of greenhouse gas (GHG) emissions generated by the production, transportation and refining of a barrel of oil. On this metric, several low-cost producers do not rank well.<\/li><\/ul>"},{"layout":"linklist","uid":25398,"publicationDate":"27 May 16:53","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2021_180253.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJJlwGHsLXJWzNp2bwEALOQk=&T=1&T=1","protectedFileLinkDe":"","protectedFileLinkIt":""},"title":"Economics Thinking - Boosting Italy\u00b4s female labor participation","product":"Economics Thinking","synopsis":"<ul class=\"ucrBullets\"><li> Among advanced economies, Italy has the lowest female participation rate (55%). Boosting it is not just a matter of social fairness, it is necessary to offset the negative growth spillover from a shrinking and aging workforce. <\/li><li> For both cultural and economic reasons, Spain is the natural eurozone comparison for Italy when it comes to boosting female labor participation. Starting in 2000, in less than ten years Spain managed to catch up with the eurozone average.<\/li><li> A less-pronounced gender pay gap for highly educated female workers and a homogenous rise in the participation rate across regions is what sets Spain apart from Italy. In terms of family-friendly policies, the difference between the two countries is not substantial.<\/li><li> Both Italy and Spain need to look at the Nordic experience to find the right balance between family-friendly tax systems and in-kind transfers, which appear to be an effective means of supporting female labor participation in these countries.<\/li><\/ul>"},{"layout":"linklist","uid":25357,"publicationDate":"23 May 14:22","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2021_180210.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJJlwGHsLXJWzvyBCd45qe9c=&T=1","protectedFileLinkDe":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2021_180210.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJJlwGHsLXJWzvyBCd45qe9c=&T=1&T=1","protectedFileLinkIt":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2021_180210.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJJlwGHsLXJWzvyBCd45qe9c=&T=1&T=1"},"title":"Chief Economist\u00b4s Comment - Sunday Wrap","product":"Chief Economist's Comment","synopsis":"<ul class=\"ucrBullets\"><li> I\u2019ll start by summarizing the key factors which led to this \u201cgreat reversal\u201d in government involvement, which go to illustrate that it is not just the \u201cflavor of the month\u201d in policymaking in reaction to the pandemic, but something reaching much deeper.<\/li><\/ul><ul class=\"ucrBullets\"><li> I\u2019ll then discuss the three key examples from this past week of governments setting this process in motion to \u201ctake back control\u201d:<\/li><\/ul><ul class=\"ucrBullets\"><li> In climate change, the G7 agreed to raise the level of ambitions and limit the increase in average temperatures to 1.5C, and they agreed to end international funding of coal. Good, but there is still a very long way to go\u2026<\/li><\/ul><ul class=\"ucrBullets\"><li> In taxation of multinationals, the US adjusted its minimum tax proposal, therefore increasing the chance of compromise, and the European Commission published a paper on corporate taxation guidelines in the EU. Good, but there is still a very long way to go\u2026<\/li><\/ul><ul class=\"ucrBullets\"><li> In monetary sovereignty, China and the US finally took aim at the market for private cryptocurrencies. Good, and there is not a long way to go to put this confusion to bed\u2026<\/li><\/ul>"},{"layout":"linklist","uid":25355,"publicationDate":"21 May 15:05","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2021_180208.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJJlwGHsLXJWzq-4KnlPwY18=&T=1","protectedFileLinkDe":"","protectedFileLinkIt":""},"title":"Chart of the Week - Eurozone manufacturers face surging price pressure ","product":"Chart of the Week","synopsis":"<ul class=\"ucrBullets\"><li> The eurozone PMIs for May flagged an acceleration in economic activity and surging pipeline price pressure in the manufacturing sector. The composite PMI rose to 56.9 from 53.8 \u2013 the fastest pace of expansion in more than three years. At face value, today\u2019s figure is consistent with annualized GDP growth of around 3%. The services sector, which is benefiting from a faster vaccine rollout and the gradual lifting of restrictions, was the main driver of the acceleration. The manufacturing PMI remained roughly flat at 62.8, just below its record-high level hit last month. Our Chart of the Week shows the unprecedented increases in input and output price indexes amid a record lengthening in suppliers\u2019 delivery times.<\/li><\/ul><ul class=\"ucrBullets\"><li> The red line indicates that supply chain strains are intensifying to unprecedented levels. The index for suppliers\u2019 delivery times continued to decline (on a reversed scale in the chart), hitting a historic low in the survey\u2019s 23-year history. Not even at the time of the Great Lockdown, when a large part of the global economy was shutdown, did this index hit such lows. At that time, longer delivery times were entirely explained by supply issues, while today activity congestion is caused by a combination of strong demand, supply shortages of some raw materials and other inputs (including labour), and supply chain bottlenecks that are preventing manufacturers from smoothly processing new orders that are coming in at fast pace. <\/li><\/ul><ul class=\"ucrBullets\"><li> Demand-supply imbalances are fueling pipeline price pressure. The input prices index hit another historic high as factories compete for increasingly scarce inputs. Firms are also progressively passing on higher production costs; the output prices index (which correlates tightly with PPI inflation) rose strongly again and hit another record high. The extent of the pass-through to CPI remains very uncertain, but the fact that most of the pipeline pressure is materializing in the energy and intermediate good sectors seem to indicate that the overall spillover to consumer inflation will not be large. In any case, the ECB has already signaled that it regards the current price shocks as temporary, and rightly so, although, supply shortages could persist for longer than originally anticipated. Therefore, the central bank will be willing to look through it so long as measures of inflation expectations remain well anchored, which seems likely. <\/li><\/ul>"},{"layout":"linklist","uid":25302,"publicationDate":"16 May 14:21","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2021_180146.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJK3Us8-eDTIi8h_rcilV20c=&T=1&T=1","protectedFileLinkDe":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2021_180146.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJK3Us8-eDTIi8h_rcilV20c=&T=1&T=1","protectedFileLinkIt":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2021_180146.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJK3Us8-eDTIi8h_rcilV20c=&T=1&T=1"},"title":"Chief Economist\u00b4s Comment - Sunday Wrap","product":"Chief Economist's Comment","synopsis":"<p><ul class=\"ucrBullets\"><li><strong> The big jump in US inflation for April: <\/strong> I\u00b4ll argue that it\u00b4s \"noise\" and that you can safely look through it, as indeed key policymakers have made clear they will. But this noise will continue for some months, and could get worse before it gets better. The central banks need to keep their cool.<\/p><\/li><\/ul><p><ul class=\"ucrBullets\"><li> The big moves in Bitcoin and other crypto-currencies this past week on the back of Elon Musk\u00b4s statements, as well as the news of prominent hedge fund backing for a new crypto-asset exchange. I\u00b4ll argue that the underlying technologies, exciting as they are, have moved from being \"positive signals\" of opportunities to \"negative signal\" with potentially serious troublesome externalities, which need to be addressed.<\/p><\/li><\/ul><p><ul class=\"ucrBullets\"><li> The US Republican party\u00b4s replacement of Liz Cheney with a Trump-follower in its congressional leadership. I interpret the GOP\u00b4s alignment with Trump\u00b4s claim that the election was stolen, in spite of the court rulings to the contrary, as the party\u00b4s willingness to undercut the judiciary branch of government. If so, this is a signal of immense importance as it threatens the very foundation of US democracy.<\/p><\/li><\/ul>"},{"layout":"linklist","uid":25301,"publicationDate":"14 May 16:38","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2021_180145.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJK3Us8-eDTIikWNKbmqLBaw=&T=1&T=1","protectedFileLinkDe":"","protectedFileLinkIt":""},"title":"Chart of the Week - US inflation: Don`t be fooled by outliers","product":"Chart of the Week","synopsis":"<ul class=\"ucrBullets\"><li> US CPI rose 0.8% mom in April, the largest monthly rise since 2009, while core CPI (which excludes the volatile food and energy components) rose 0.9% mom, the most since 1982. Our Chart of the Week shows that April\u00b4s rise in inflation was driven by outliers, as shown by the relatively small rise in the Cleveland Fed\u00b4s median CPI and the trimmed-mean CPI, which remove the effects of large and small price changes of the components in the CPI.1 Indeed, most of the monthly move in headline CPI was due to just four components: used cars and trucks, lodging away from home, airfares and car and truck rental. Together these components contributed 0.5pp, or 60%, to the 0.8% monthly rise in headline inflation.<\/li><li> There are two main explanations for these outsized moves. First, the global shortage of semiconductors is weighing on car production and likely boosted the prices of used cars as buyers sought alternatives. Second, the reopening of the economy has boosted hotel prices and airfares amid supply constraints and pent-up demand. For some items (such as airfares and lodging away from home) prices are still well below pre-pandemic levels, while for others (such as used cars and car rental) they are well above. <\/li><li> An important question is whether the volatile CPI components are signal or noise. Statistical tests suggest they are mostly noise, and the more one abstracts from volatile components (and not just energy and food) the better one can do, on average, in terms of identifying the trend in headline CPI inflation.2 It is well-known that energy and food prices are volatile, that their disturbances typically get reversed and, hence, are often not related to the general trend in the economy-wide price level. The same reasoning applies to any unusually large or small price changes.<\/li><li> The April data has added fuel to the debate about how large and persistent the rise in inflation may be, amid rising commodity prices, supply bottlenecks, huge fiscal stimulus, and pent-up demand for some services as COVID-19 related restrictions are eased. While these effects should prove temporary as supply adjusts to meet demand (the fiscal stimulus is a one-off and pent-up demand should ease later in the year), the supply-demand imbalances could persist for a few months and uncertainty remains very high. For example, it seems likely that the global shortage of semiconductors is partly due to a structural shift towards the faster adoption of technology in response to the pandemic, while supply disruption from COVID-19 related restrictions and health concerns should ease as more people are vaccinated. Importantly, for the rise in inflation to be enduring, the price level would have to keep rising at the same rate, which seems highly unlikely given the temporary, albeit large, nature of the shocks. There remains significant spare capacity in the labor market and the Phillips curve (the empirical relationship between unemployment or spare capacity and inflation) is fairly flat. While inflation expectations can be self-fulfilling, medium-to-long-term inflation expectations remain well anchored, and the Fed\u00b4s monetary policy framework is likely to keep it this way.<\/li><\/ul>"},{"layout":"linklist","uid":25255,"publicationDate":"09 May 13:17","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2021_180088.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJLvoB7Z-hhFGnoWUoLLbuNc=&T=1&T=1","protectedFileLinkDe":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2021_180088.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJLvoB7Z-hhFGnoWUoLLbuNc=&T=1&T=1","protectedFileLinkIt":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2021_180088.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJLvoB7Z-hhFGnoWUoLLbuNc=&T=1&T=1"},"title":"Chief Economist\u00b4s Comment - Sunday Wrap","product":"Chief Economist's Comment","synopsis":"<p><ul class=\"ucrBullets\"><li> I\u00b4ll remind you of the better economic outlook, but the still missing inflation.<\/p><\/li><\/ul><p><ul class=\"ucrBullets\"><li> I\u00b4ll argue that after almost a decade of too low inflation, the limitations of inflation targeting have been exposed, which has made central banks less powerful.<\/p><\/li><\/ul><p><ul class=\"ucrBullets\"><li> I\u00b4ll discuss what to do about the too-low inflation, including the role of fiscal policy and the illusion of independent monetary policy in a global world (for anyone apart from the Fed).<\/p><\/li><\/ul><p><ul class=\"ucrBullets\"><li> I\u00b4ll conclude with what this means for European fiscal and monetary strategies ' and the probability that we\u00b4ll get what it takes.<\/p><\/li><\/ul>"}]

fca5774f669803887558f1f8bf49f8ba6cbad35f9de48a9f1720f5619f212128;;[{"layout":"linklist","uid":24939,"publicationDate":"30 Mar 16:37","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/emergingmarkets_docs_2021_179703.ashx?EXT=pdf&KEY=l6KjPzSYBBGzROuioxedUNdVqq1wFeRowj6TkjKKn2ls2gVPgAyjlQ==&&T=1","protectedFileLinkDe":"https:\/\/www.research.unicredit.eu\/DocsKey\/emergingmarkets_docs_2021_179875.ashx?EXT=pdf&KEY=l6KjPzSYBBGzROuioxedUNdVqq1wFeRoEdA9viEd5lMZpoEVNJjC3g==&T=1&T=1","protectedFileLinkIt":""},"title":"CEE Quarterly - Stronger recovery requires pandemic control (2Q21)","product":"CEE Quarterly","synopsis":"<p><ul class=\"ucrBullets\"><li> We expect EU-CEE economies to grow by 3.9% in 2021 and 4.5% in 2022. Last year\u2019s economic losses could be recovered this year in Hungary, Poland and Romania and the next year elsewhere. The western Balkans could outpace EU-CEE.<\/p><\/li><\/ul><p> <ul class=\"ucrBullets\"><li> Russia could grow by 2.5-3% in 2021-22 and the Turkish economy is likely to grow at 4.7% in 2021 and 2.3% in 2022 after avoiding a contraction in 2020. <\/p><\/li><\/ul><p> <ul class=\"ucrBullets\"><li> Failure to control the pandemic could slow the recovery by affecting services and construction. Vaccination is not enough to avoid future lockdowns, with governments having to test, track and trace more than they do at the moment. <\/p><\/li><\/ul><p> <ul class=\"ucrBullets\"><li> Households and companies are both in a good position to start spending once restrictions are eased. <\/p><\/li><\/ul><p> <ul class=\"ucrBullets\"><li> Government may have to increase economic support if the pandemic is not controlled. With few exceptions, fiscal impulses are likely to be negative in 2021-22.<\/p><\/li><\/ul><p> <ul class=\"ucrBullets\"><li> CEE benefits from larger stable capital flows than other EM. EU transfers in EU-CEE and the western Balkans will ensure positive extended basic balances in all countries but Romania. Revenue from commodity exports will boost reserves in Russia. <\/p><\/li><\/ul><p> <ul class=\"ucrBullets\"><li> A move to looser monetary policy could widen macroeconomic imbalances in Turkey, forcing an adjustment of the C\/A and affecting the exchange rate, inflation and growth. <\/p><\/li><\/ul><p> <ul class=\"ucrBullets\"><li> The main economic risks are a slow recovery amid a raging pandemic and, in Turkey, a forced adjustment of the economy.<\/p><\/li><\/ul><p> <ul class=\"ucrBullets\"><li> Elections in Bulgaria and Czechia are highly uncertain due to the incumbent administrations\u2019 handling of the pandemic. <\/p><\/li><\/ul><p> <ul class=\"ucrBullets\"><li> Russia faces limited sanctions related to Nord Stream 2, but more consequential sanctions related to potential interference in US elections. In an extreme scenario, the OFZ market could be affected.<\/p><\/li><\/ul><p> <ul class=\"ucrBullets\"><li> We see limited risk of crippling sanctions against Turkey from the EU and the US.<\/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"}}]