The coronavirus has spread across Emerging Europe faster than any other region in the emerging world and governments have implemented increasingly restrictive measures to contain its spread. These measures, combined with the effects of social distancing on economic activity and a slump in external demand, will cause regional GDP to contract by 2.0% this year, its worst performance since the global financial crisis. The policy response from central banks has been aggressive and we think that governments will need to step up fiscal support over the coming weeks and months in order to cushion the hit to activity.
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