Search
New Europe Weekly
0
0
Peak time in EMEA inflation
Tue, Sep 2 2008, 09:26 GMT
by Danske Research Team
We expect a cocktail of lower oil prices, slowing growth and base effect to drag down inflation in the EMEA area in the coming quarters. In some countries inflation has already peaked - for example, in Bulgaria where inflation dropped for the first time this year in July. Other countries could follow this downward trend when numbers on August inflation are released - for example, the Czech Republic, Poland and Hungary.
There are relatively large differences between the outlooks for inflation in the respective countries in the region. For example, we expect Hungarian and Polish inflation to remain relatively elevated into the first half of 2009, while Czech inflation is likely to fall from above 6% y/y by the end of 2008 to 3-4% y/y in Q1 08 on the back of a relatively strong base. In Slovakia inflation is expected to remain at just below 5% y/y throughout the year and then begin to decline as of January.
In Turkey the numbers on inflation in August showed a surprising drop in what could very well mark the peak for Turkish inflation. However, even though a continuing fall in food and oil prices will put downward pressure on inflation, a base effect could push inflation up at the end of 2008.
As for the Baltic countries inflation is likely to begin to decline, although we expect it to stay at a relatively high level into 2009. The sharp economic slowdown is expected to contribute to lower inflation in this region.
The greatest risk to the short-term outlook for inflation is undoubtedly oil and food prices. Recently oil prices have come down significantly, but if the uptrend in oil prices is to resume then the inflation outlook in EMEA could turn more negative. Furthermore, most currencies in the region have weakened recently and this could add to inflationary pressures. However, we do not see this as a major risk for now as the weakening of the CEE currencies especially has been fairly moderate.
Published on Fri, Sep 5 2008, 14:31 GMT
Archive
- The Russian central bank treads a dangerous path
Published On Fri, Nov 28 2008, 16:27 GMT - Rating cycle turning decisively negative
Published On Fri, Nov 21 2008, 13:56 GMT - The zloty's surprising demise
Published On Fri, Nov 14 2008, 15:59 GMT - Sharp drop in inflation equals lower rates
Published On Fri, Nov 7 2008, 15:24 GMT - A challenge for EU cooperation
Published On Fri, Oct 31 2008, 15:30 GMT
Danske Bank
| Holmens Kanal 2-12, DK-1092 Copenhagen
http://www.danskebank.com/ | danskeresearch@danskebank.com
Legal disclaimer and risk disclosure
This publication has been prepared by Danske Bank for information purposes only. It is not an offer or solicitation of any offer to purchase or sell any financial instrument. Whilst reasonable care has been taken to ensure that its contents are not untrue or misleading, no representation is made as to its accuracy or completeness and no liability is accepted for any loss arising from reliance on it. Danske Bank, its affiliates or staff, may perform services for, solicit business from, hold long or short positions in, or otherwise be interested in the investments (including derivatives), of any issuer mentioned herein. Danske Bank's research analysts are not permitted to invest in securities under coverage in their research sector. This publication is not intended for private customers in the UK or any person in the US. Danske Bank A/S is regulated by the FSA for the conduct of designated investment business in the UK and is a member of the London Stock Exchange. Copyright () Danske Bank A/S. All rights reserved. This publication is protected by copyright and may not be reproduced in whole or in part without permission.Interested in forex trading? forex brokerage firms!
FXstreet.com will give you a 3 months membership as soon as minimum rebates have been generated (€150 for private trader/ €300 for corporate trader)
[Read Premium full description]
Trading foreign exchange on margin carries a high level of risk and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading and seek advice from an independent financial advisor if you have any doubts.
Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. FXstreet.com has not verified the accuracy or basis-in-fact of any claim or statement made by any independent author: errors and Omissions may occur.
Any opinions, news, research, analyses, prices or other information contained on this website, by FXstreet.com, its employees, partners or contributors, is provided as general market commentary and does not constitute investment advice. FXstreet.com will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.
©2008 "FXstreet.com. The Forex Market" All Rights Reserved.