CEE/CIS: The engine is cooling down

Fri, Oct 12 2007, 10:41 GMT
by Lars Christensen, Lars Rasmussen

• Growth is set to slow down in Central and Eastern Europe and in Eurasia. Luckily the slowdown is set to be fairly soft in the larger economies in the region such as Russia and Poland, while the smaller economies in the Baltics and south-eastern Europe are set for a significantly harder landing.
• The slowdown in growth is especially driven by significantly tighter credit conditions in the region - especially in the Baltic states and Kazakhstan.
• The slowdown will particularly be visible in domestic demand and we expect a fairly strong slowdown in private consumption, property prices and construction activity.
• Rising inflation and wage growth is a problem everywhere in the region. The acceleration in inflation on the back of in particular, higher food and energy prices, could weigh on private consumption.

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Published On Fri, Oct 12 2007, 10:41 GMT

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