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Q4-2016 flash GDP estimates confirm that the economies of the region are in good shape. Private consumption in the driver’s seat on improved sentiment, rising real wages, firmer labor markets and low inflation. A more challenging macro outlook in 2017 for the region: Limited room for further monetary and fiscal stimulus. Emerging market stocks as well as external sovereign and corporate debt have broadly extended last year’s gain. The positive tone spread over to regional assets. Most EM currencies firmed; but, in the CESEE space have been little changed, with country-specific factors remaining largely at play. Risks this year are particularly elevated due to a cramped political events calendar in Europe, uncertainty over new US administration’s policies, ECB and Fed monetary policies to remain in the forefront.