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6:17 AM Sunday, September 24, 2017
Finance
Eastern Europe's Economies Grow in Q1
Timothy Ash
Emerging Europe benefits from new investment; Ukraine challenged to catch up with 4-5 percent growth in neighbors Poland, Hungary and Romania
image/svg+xml Kyiv Lutsk Rivne Zhytomyr Lviv Ternopil Khmelnytskyi Uzhgorod Chernivtsi Vinnytsia Chernigiv Sumy Kharkiv Poltava Cherkasy Kirovohrad Lugansk Dnipropetrovsk Donetsk Zaporizhzhia Mykolaiv Odesa Kherson Simferopol Sevastopol Ivano- Frankivsk

Really impressive first quarter growth data coming through across Emerging Europe this morning, which is sending a message of a Europe which is healing, both politically, but also economically:

  • Romania, 5.7% YOY growth, up from 4.8% YOY in the prior quarter, and ahead of 4.5% consensus for forecast according to Bloomberg.
  • Slovakia, 3.1% YOY growth, up from 3% YOY in the prior quarter, and spot on the 3.1% consensus for forecast according to Bloomberg.
  • Czech Republic, 2.9% YOY growth, up from 1.9% YOY in the prior quarter, and ahead of 2.3% consensus for forecast according to Bloomberg.
  • Hungary, 4.1% YOY growth, up from 1.6% YOY in the prior quarter, and ahead of 3.2% consensus for forecast according to Bloomberg.
  • Poland, 4% YOY growth, up from 2.7% YOY in the prior quarter, and ahead of 3.9% consensus for forecast according to Bloomberg.
  • Bulgaria, 3.4% YOY growth, on par with the 3.4% YOY in the prior quarter, and ahead of 3.2% consensus for forecast according to Bloomberg.
  • Ukraine, posted its first quarter number yesterday and while the 2.4% YOY print was down from 4.8% YOY in Q4, and below the 3% consensus, the slowdown was largely the result of the blockade in the East earlier in the year.

  • On the political front the threat from the populist impulse seen in the UK with Brexit, and in the US with Trump is forcing European electorates more to the centre and what they know best.
  • This was seen in the Dutch and French elections, the recent state elections in Germany. For the future, seemingly, as per opinion polls, in the UK, and Germany heading into the elections in September.
  • Emerging Europe is also benefitting from recovery in Western Europe, but also there is an extra impulse from broader investment into the region. Chinese investment in the region is also on the rise.

Timothy Ash is senior sovereign strategy analyst for BlueBay Asset Management, London

Photo: When this kindergartener in Dnipro hits the job market in 20 years, he will hope that Ukrainian politicians will have created a Ukraine with good jobs. (UNIAN/ Sergey Diveev Sergey)

Posted May 16, 2017

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