Eastern Europe's rate policies diverge with Czech cut
2024; Emerald Publishing Limited; Linguagem: Inglês
10.1108/oxan-db285741
ISSN2633-304X
Tópico(s)Regional Development and Policy
ResumoSignificance The NBP is not cutting interest rates further partly because of tensions with Prime Minister Donald Tusk’s pro-EU government, following the defeat of the nationalist Law and Justice party in last October’s parliamentary elections. After leading the global monetary policy easing cycle, Central Europe faces facing political and economic headwinds leading to growing policy divergences. Impacts Economic contraction in Germany, which accounts for between one-fifth and one-quarter of Central Europe’s exports, will hit hard. Domestic consumption is becoming the main driver of growth in Central Europe, providing more scope for Poland to outperform. Foreign investors are positioning themselves for a further decline in Czech bond yields, as interest rates start to fall.
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