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Macro week ahead

 
12.05.2014
This week, the key macro news across our CEMEEA universe is concentrated in the CEE3 region, where we expect 1Q14 GDP releases as well as CPI reports for April. Otherwise, in Russia there is to be more hard data for April: the AEB is to present new car sales statistics, customs publishes its non-CIS imports and the Ministry of Finance is to unveil budget execution numbers. Also worth watching in Russia are 1Q14 GDP growth and the weekly CPI report for 6-12 May.

The economic calendar this week is denser than for the first week of May, with CEE3 statistics in the spotlight. The ongoing recovery in the EU is spilling over to all three countries as a more solid inflow of export orders, where local demand is supported by the accommodative domestic policy mix. 2014 has started promisingly, with gains in IP and retail sales. The overall picture, though, is one of a mild, not booming, recovery. In Poland, the largest economy in the sub-region, we see a further acceleration to near 3.0%, from 2.7% YoY in 4Q13. In Hungary, some pick-up in sequential growth is also anticipated, but in YoY terms it might be flat at 2.7% owing to the less beneficial base effect than a quarter ago.

As for the Czech Republic, the weak crown (the CNB drew the line at 27 against the euro) and the highly favourable base effect might have boosted growth significantly in 1Q14 to 2.5% YoY.

However, CEE inflation is likely close to zero, well below respective targets. In Russia, MinEconomy guided for an 0.8% YoY gain in GDP growth in 1Q14 (and - 0.5% QoQ SA), but we are more conservative, expecting 0.6% YoY with a 1.3% QoQ SA drop. Component-wise, slowing local consumption with a pronounced drop in investment will only be partly offset by a pick-up in net exports (led by weaker imports).

Otherwise, we anticipate weakness in sequential growth in car sales (after a temporary caution-motivated upheaval), a further decline in non-CIS imports and a rise pork prices inflation.

Vladimir Kolychev, Daria Isakova
VTB Capital analyst

Tags:
GDP, CPI, inflation

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