EBRD: January Economic Forecast Summary
Overview:
The EBRD has not changed its aggregate growth forecast for the Transition Countries (TC) much in its January Outlook compared to the October version. Growth in some countries has been adversely affected by a poor harvest (e.g. Russia and Ukraine) while others are enjoying a stronger than expected recovery due to buoyant external demand. Despite a strong growth performance in 2010 and favourable outlook for 2011 considerable risks remain. The strong liquidity emanating from low interest rates/quantitive easing in the developed world is pushing commodity prices higher and will lead to higher inflation and, therefore, interest rates. Continued financial turbulence in the Euro area may undercut risk appetite. Domestic demand is recovering in some countries but others still have large debt overhangs.