A soft start to the year

The slowdown in growth in Emerging Europe appears to have bottomed out in the first quarter of this year. We estimate that, at an aggregate level, the region grew by around 0.8% y/y, in line with growth in Q4 of last year. At a country level, Russia has been an underperformer – its economy has continued to slow in Q1, even taking into account the improvement in March’s activity data. But this has been offset by a stabilisation in Poland’s economy and further acceleration in Turkey. The bigger picture, however, is that growth is still sluggish across the region. And looking ahead, the weakening of the latest survey data in the euro-zone, and in Germany in particular, has dented hopes of a much stronger Q2 for Emerging Europe.