Monday, March 31, 2008

Inflation pressures in European emerging markets.

Consumer prices in New Europe continue to grow up. Like Baltic states where for all three countries inflation is above 10 %. The highest rate is in Latvia with 16,5% followed by Estonia (11,5%) and Lithuania (10,9%). EU newcomers Bulgaria and Romania don't skew with 12,2% respectively 8%.

Also other economies of Central Europe (Czech Republic, Hungary, Poland) are well above targets. Central banks will be forced again to tighten monetary policy in coming month.

Surging inflation in Baltic states could postpone membership to join euro-zone. Nevertheless this year global slowdown could result in cutting cost of money by ECB. Central banks in Central and Eastern Europe predict ease for the rest of the year.


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