(MENAFN- ING) Russian retail sales and a possible rate hike in Hungary will be this week's highlights
In this article - Russia: Annual growth rates expected to decelerate
- Hungary: Rising inflation will strengthen the hawkish tone
Shutterstock
Share
Download article as PDF
Newsletter
Stay up to date with all of ING's latest economic and financial analysis.
Subscribe to THINK Russia: Annual growth rates expected to decelerate
Russian activity data for June is likely to show moderation in the annual growth rates, primarily due to the base effect. But growth in retail trade should remain in double-digit territory. For the second half of the year, we are more cautious, as in addition to the statistical effects, consumption should become more constrained by the reopening of mass outward tourism while accelerating inflation will eat into real incomes. Still, the recovery trend could be supported by fiscal policy, if additional non-oil revenues collected from this year's budget are re-distributed in favour of current spending, ahead of September's parliamentary elections.
Hungary: Rising inflation will strengthen the hawkish tone
In Hungary, the highlight of the coming week is the July rate setting meeting. After a significant upside surprise in inflation in June, we see the central bank continuing its hiking cycle with a 30bp effective move. This will put both the base rate and the one-week deposit rate at 1.20%. The National Bank of Hungary could also strengthen its hawkish message by moving the whole interest rate corridor upwards. With such a shift, the overnight deposit rate would move back to positive territory for the first time since early 2016. When it comes to the forward guidance, we see no change to the hawkish tone. Later in the week, incoming labour market data will be pro-inflationary, with strong wage growth and a further drop in the unemployment rate (increasing the labour shortage) in Hungary.
EMEA Economic Calendar
Refinitiv, ING, *GMT
This article is part of
Our view on next week's key events View 3 articles Share
Download article as PDF
MENAFN25072021000222011065ID1102498758
Author:
Dmitry Dolgin , Peter Virovacz
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.