Eastern Europe response to ECB stimulus

Reactions to the bold policy announcement from the European Central Bank on March 10 were mixed for Eastern European economies. The injection of more monetary stimulus to the euro zone banking system may reduce the vulnerability of some high debt countries and coporates in Eastern Europe. Yet a lack of confidence in the global economic outlook continues to raise questions about the effectiveness of intensely accommodative measures. Forecasts collected in our latest monthly surveys suggest that most countries will struggle to achieve an expansion in 2016 that exceeded that of 2015. Notable exceptions include Estonia and Lithuania, which both started from a lower base of comparison, having performed relatively poorly in 2015.

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