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2018/08/14 / Erste Group Research

CEE Special Report: Turkish impact manageable on CEE markets


CEE exports to Turkey amount to 0.4-1.3% of GDP only. The fundamental picture of CEE is also incomparable to Turkey. CEE FXFI markets were thus moderately affected. If Turkish tensions persist, CEE markets could weaken slightly further, but they could gain if the Turkish situation calmed.

Turkish markets have recently been tumbling very intensively. There was already pressure on Turkish markets before the negative news from Turkey came, given that the funding cost of the US dollar was going up, amid the tightening of the monetary policy of the US Fed. The more recent developments intensified the tensions on Turkish markets much further, however.

It is currently not visible how and when the Turkish situation will be solved. Looking at our region, however, we can see that the fallout from the Turkish situation is manageable. Exports to Turkey range from 1.0 percent to 4.0 percent of total exports (and just 0.4 percent to 1.3 percent of GDP), which is minimal compared to the often one fifth to one fourth ratio of German exports to GDP. Additionally, CEE does not compare fundamentally to Turkey.


Additional, slight weakening could be imagined if the Turkish situation deteriorated further, but such a weakening for CEE would be manageable. In addition, if Turkish problems eased in the near future, CEE markets would benefit.



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General information

AuthorErste Group Research
Date2018/08/14
Languageen
Product nameCEE Economies Special Report
Topic in focusFX, Macro/ Fixed income
Economy in focusCroatia, Czech Republic, Hungary, Poland, Romania, Serbia, Slovakia, Slovenia
Currency in focusCroatian Kuna, Czech Koruna, Euro, Hungarian Forint, Polish Zloty, Romanian Leu, Serbian dinar
Sector in focus-
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