Key Events In EMEA For The Week Of Monday, October 2

By Paolo PiMuhammet Mercan, Peter Virovacz & Adam Antoniakzzoli of ING Economics

Saturday, September 30, 2023 3:52 AM EST

Data from Hungary should show a slight improvement in economic momentum, annual inflation in Turkey is expected to increase further while in Poland, a sharp fall in inflation suggests the central bank will continue its monetary easing cycle.

Hungary: Slight improvement in economic momentum expected following activity data

The Hungarian Central Statistical Office will publish the latest data on economic activity next week. We expect a slight improvement in momentum based on the monthly performance of the retail and industrial sectors. The World Athletics Championships in Budapest could temporarily boost retail sales with a significant influx of tourists. Based on some survey indicators and the track record of industrial production during the summer in recent years, we see some improvement in the export sectors and, this time, perhaps also some temporary support from the sectors driven by domestic demand. We don't think that this improvement will be sustainable but after four quarters of technical recession, any small positive change that can bring the recessionary period to an end is to be welcomed.

Turkey: Annual inflation expected to increase further to 61.5%

Given the deterioration in pricing behaviour, currency weakness, widespread increase in wages and tax adjustments and markedly negative ex-post and ex-ante real policy rate, inflation will likely remain under pressure in the near term. Accordingly, we expect annual inflation to increase further to 61.5% in September (with a 4.7% month-on-month reading) from 58.9% a month ago.

Poland: A 25bp cut expected

With CPI inflation falling sharply in September, the National Bank of Poland is expected to continue its monetary easing cycle in October. However, the size of the cut should be smaller than in September in order to avoid further depreciation of the zloty. The FX market reaction to September's 75bp rate cut most likely surprised the MPC and may make further disinflation more difficult. We expect a 25bp rate cut at the policy meeting on Wednesday and the main NBP rate to decline to 5.50% by the end of 2023, from the current 6.00%.

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Disclaimer: This publication has been prepared by the Economic and Financial Analysis Division of ING Bank N.V. (“ING”) solely for information purposes without regard to any ...

Disclaimer: This publication has been prepared by the Economic and Financial Analysis Division of ING Bank N.V. (“ING”) solely for information purposes without regard to any particular user's investment objectives, financial situation, or means. ING forms part of ING Group (being for this purpose ING Group NV and its subsidiary and affiliated companies). The information in the publication is not an investment recommendation and it is not investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Reasonable care has been taken to ensure that this publication is not untrue or misleading when published, but ING does not represent that it is accurate or complete. ING does not accept any liability for any direct, indirect or consequential loss arising from any use of this publication. Unless otherwise stated, any views, forecasts, or estimates are solely those of the author(s), as of the date of the publication and are subject to change without notice.

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