Key events in EMEA next week
ING’s view on upcoming key data and events in central and eastern Europe
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%.
| 2.2% |
Czech January inflationyear-on-year |
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.
| 7.1% |
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).
| 5.3% |
Poland 4Q17 growthyear-on-year |
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.
| -50 |
Russian interest rate cutbasis points |
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.
Download
Download article"THINK Outside" is a collection of specially commissioned content from third-party sources, such as economic think-tanks and academic institutions, that ING deems reliable and from non-research departments within ING. ING Bank N.V. ("ING") uses these sources to expand the range of opinions you can find on the THINK website. Some of these sources are not the property of or managed by ING, and therefore ING cannot always guarantee the correctness, completeness, actuality and quality of such sources, nor the availability at any given time of the data and information provided, and ING cannot accept any liability in this respect, insofar as this is permissible pursuant to the applicable laws and regulations.
This publication does not necessarily reflect the ING house view. This publication has been prepared solely for information purposes without regard to any particular user's investment objectives, financial situation, or means. The information in the publication is not an investment recommendation and it is not investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Reasonable care has been taken to ensure that this publication is not untrue or misleading when published, but ING does not represent that it is accurate or complete. ING does not accept any liability for any direct, indirect or consequential loss arising from any use of this publication. Unless otherwise stated, any views, forecasts, or estimates are solely those of the author(s), as of the date of the publication and are subject to change without notice.
The distribution of this publication may be restricted by law or regulation in different jurisdictions and persons into whose possession this publication comes should inform themselves about, and observe, such restrictions.
Copyright and database rights protection exists in this report and it may not be reproduced, distributed or published by any person for any purpose without the prior express consent of ING. All rights are reserved.
ING Bank N.V. is authorised by the Dutch Central Bank and supervised by the European Central Bank (ECB), the Dutch Central Bank (DNB) and the Dutch Authority for the Financial Markets (AFM). ING Bank N.V. is incorporated in the Netherlands (Trade Register no. 33031431 Amsterdam).