EMEA Economic Calendar
Czech Republic: possible inflation surprise
Preliminary figures indicate that food prices slightly fell in January and that fuel prices increased by just 0.4% month-on-month. Taking the higher base from January 2017 into account, January inflation might slightly decelerate to 2.2% year-on-year. January forecasts, however, are the most difficult ones as many prices get changed at the beginning of the year, therefore CPI might slightly surprise in both directions next week. The flash GDP estimate should indicate solid economic activity accelerating close to 5.5% in 4Q17, confirming an average GDP growth in 2017 at 4.5%.
Czech January inflation
Romania and Bulgaria: a strong end to 2017
In Romania, we expect 4Q17 to slow down in sequential terms, but still print a very impressive growth of 7.1% for the whole of 2017. We expect January 2018 inflation to spike to 4.1% year-on-year from 3.3% previously as the tax cuts from January 2017 drop out of the statistical base and as the regulator announced an increase in gas prices during the month.
Romania 2017 growth
In Bulgaria we see GDP growth momentum holding on into 4Q17, which should lead to a robust 4.0% expansion for the whole 2017.
Poland: robust activity figures not translating into inflation
We expect 4Q17 GDP to accelerate from 4.9% to 5.3% year-on-year, supported by decent consumption performance (5% YoY) and investment recovery (1.4% YoY). Robust activity figures have not translated into inflationary pressures so far – as a result CPI is likely to fall further from 2.1% to 1.8% year-on-year with still soft core inflation (0.9% YoY).
Poland 4Q17 growth
The January labour market figures will be distorted by statistical procedures (CSO resample enterprises’ panel). We expect lower wages (6.7% YoY) due to statistical procedures and the negative impact of administrative changes (lower minimum wage hike comparing to last year should subtract 0.5ppt).
The CIS space: How much will the Central Bank of Russia cut rates?
In the CIS space, the Central Bank of Russia meeting this Friday is clearly in focus where we think the regulator will chose between a 25bp and 50bp cut: we marginally favour the former as a more balanced option after the 50bp surprise in December 2017. Industrial production data next week may stay negative given the base effect, still assuming a further improvement in the overall pace.
Russian interest rate cut
In Ukraine inflation data is worth looking at, and we expect it to stay sticky at 13.7% year-on-year, keeping the National Bank of Ukraine cautious.