Eastern Europe, Real GDP YOY%
2015201620172019E2020E2021E
Eastern Europe, Real GDP YOY%2.72.54.232.82.7
Bulgaria3.73.63.93.43.32.8
Croatia2.63.13.42.72.62.3
Cyprus1.43.15.62.72.32.5
Czech Republic4.91.85.132.72.5
Estonia0.824.232.33
Georgia32.64.44.655.2
Greece0.91.11.52.21.71.6
Hungary3.12.44.33.22.62.4
Latvia2.30.66.23.22.93.2
Lithuania1.92.23.62.92.82.7
Romania4.24.18.53.63.43.1
Russia-3.7-0.21.51.71.71.5
Slovakia4.233.543.53.7
Slovenia2.83.44.53.32.72.5
Turkey4.63.13.93.93.6
Ukraine-1.42.32.433.23.7
[Positive] Teg: Russia

Russia's economy is highly depends on oil prices and I expect that the global oil prices will continue its bullish trend. Following OPEC's meeting in June, Russia is expected to increase oil production. Against the backdrop of the rising oil prices, Russia's trade surplus should significantly increase in 2018. Also I expect that the current account to remain in surplus in 2018-2022, driven by strong trade surpluses. Sanctions against Russia made negative effect on the foreign direct investment inflows, however I expect that these inflows will recover in 2019-2022. I believe in Russia's economy and bet on its stable growth in the mid-term.

Laura S. Dixon I would argue that Russian economy is highly dependent on oil and gas. It  is about 35% in my judgement. Military development is the main driver for Russia, especialy their business in Syria in order to manage oil prices  
[Positive] Teg: Georgia

According to the data of the national statistics office of Georgia, the real GDP growth increased from 2.8% in 2016 to 5% in 2017. This growth was driven by the construction, consumer goods trade, manufacturing, transport, financial services and real estate. Also on the back of increasing export volumes and prices, recovery in remittances from Russia and stable growth of earnings from tourism, the current-account deficit decreased. I forecast this trend of reducing current-account deficit will continue in 2018-2022, which will be also supported by growing private consumption and stable foreign direct investments inflows. In addition I think that political situation in the country will remain stable in the mid-term, so I have positive outlook on the economic development of Georgia.

[Negative] Teg: Turkey

After rapid increase in real GDP at the end of 2017 (+3.3% in 2016 vs +7.3% in 2017), supported by government stimulus measures and credit guarantees, as well as political pressure on banks to provide a loans and improved export competitiveness, I expect that in 2018 the Turkey's economic growth will slow down to 4%. This slowdown will reflect the impact of tax boost, higher interest rates, tightening of global liquidity against the backdrop of weaker Turkish Lira, increased inherent instability and higher inflation. As a result all planned government measures to increase employment and investment, will be fully blocked by these negative factors. In addition, foreign capital inflows will be offset by political instability in line with the transition to a presidential system of government, domestic financial vulnerability and lower interest rate in comparison with the developed economies.

[Positive] Teg: Russia

Russia's economy shows positive signs of recovery and returns to growth. The main engines of this recovery are: (1) improved and stable macroeconomic situation: low inflation, low unemployment rate, higher real wages (and, thus, domestic private demand), lower interest rates, etc., (2) improved business environment (e.g., Ease of doing business index, ranking of Russia: 2014 = 92, 2015 = 62, 2016 = 51, 2017 = 40, 2018 = 35), (3) favorable commodity prices. I assume that near-term risk associated with USA sanctions against Russian companies and USA increased import tariffs for steel and aluminum will not have significant effect for economy growth. However, there are some fundamental issues that could adversely affect Russian economy: (1) Russian banking system problems. Despite Central Bank's attempts to clean banking system, one should note that (a) these activities are rather costly (some estimate ~$40 ban up to now), (b) competitiveness is decreasing (as the share of private banks decreasing), (c) confidence of business in the banking system is low. (2) Decreasing productivity coupled with declining labor force (due to demographic). (3) Traditional dependence of Russian economy from oil and gas (mainly, due to high share of oil and gas income in Budget)

[Negative] Teg: Russia

The confrontation between Russia and the West intensified statist, nationalist and protectionist trends within the government. At this case the main priority for the Russian government will be economic sovereignty, which would be expressed by insulating the economy from external shocks. The main tools of this strategy include a large positive sovereign external asset position, protectionist measures to support domestic manufacturing through import substitution and a cautious approach to foreign investment. In my view the implementation of this strategy as part of transformation period will be associated with a slowdown in the Russian economy growth rate in the medium term. Also the weakness of most political and legal institutions, as well opaque governance system, will put additional pressure on the country in this transitory period.

[Neutral] Teg: Russia

I just want to express one interesting point on the corruption in military sector in Russia. You all remember that Russia's Military Defense Minister Mr. Anatoly Serdyukov had been accused for wasteful spending of multi-billions of rubles which were dedicated to military upgrade and development. And what did Mr. Putin..., he just fired him but simultaneously they announced that this was an unprecedented corruption in Military Sector. Secondly, during this particular time Russians had not been doing any independent movement in global geopolitical scene. But right after that Mr. Putin demonstrated all his strength, military strength. I am assured that this was a strategic rational for this: they just showed to the world that Military Sector was under the control of such a man like Mr. Serdyukov in order to lull the world into a false sense of security that there were all thefts from senior to juniors in military sector of Russia and thus no development was possible....One day I had a meeting with senior military officer and he told me that Mr. Serdyukov never was in touch with any military officer.. This means that the Minister Mr. Serdyukov was just a folding screen behind which the really development of military force was underway. Maybe this is untrue but logically reasonable. I do not want to say that Russia does not have a corruption, It has indeed but I think that that strategic sectors are under close control.

[Positive] Teg: Russia

Russian Government set 2% target growth for 2018 year, I would suggest two main factors which are the base of such growth forecast. Firstly, the growth of internal consumption due to inflation dropped (to 2-3 percent, a level never imaginable for Russia) which ultimately strengthen real wages and thus spending.. Secondly, oil prices, as we see there is a gradual and steady increase in global oil pricing high exceed 3 years history - above $70 per barrel, this brightens Russia's outlook. I would bet minimum 4% of GDP growth for the next 3 years

[Positive] Teg: Russia

Russian economy is coming out of recession stronger and more stable than before despite western financial sanctions. Russian banks and companies considerable reduced their dependence on foreign debt. Personally, I am focused and domiciled in the USA and now I am becoming more interesting in the opportunity that offers Russian economy. As shown by many macro indicators, Russian economy has easily survived and is clearly not torn to ribbons while some high-ranking western officials cried from every corner. In my opinion, for the last 2 years many investors were forced to turn their backs from Russia that of course caused investing deficit, but now I suppose it is right time to come back, And I am highly likely to expect better growth in 2019 as the latest

[Positive] Teg: Russia

I heard that notwithstanding the sanctions a lot of German businessmen are keen to invest and 2-3 times more right after the presidential election. I personally met about 10 good wealth persons. In my estimates this would give 2-3pp. more in GDP. I bet that Russia is one of the top country to invest in amidst emerging markets.

[Positive] Teg: Cyprus

I witnessed that due to offshore tax reform in Russia (of controlled foreign companies) a lot of Russian companies had to moved and are moving into Cyprus. The building construction (for offices and residential properties) is underway with its considerable paces.

[Positive] Teg: Turkey

As emerging economy Turkey offers the best investment case in terms of growth and downside risk in oil-linked shares. Due to positive dynamic in world oil prices as I estimate to be limited to 70 USD per barrel for 2018 year

[Neutral] Teg: Ukraine

Politicians in Ukraine are every day announcing the fight against the corruption. Sorry, but this is bullshit, and nobody may believe in this. Poroshenko by himself did nothing with his own bribable pocket (I mean that before hi became the President he promised to get rid of business, but until now his wealth as businessman has indeed increase (I check Bloomberg filings and forbs statistics). For growth the key factors is to erase the corruption, but Ukraine will fail to do it , there will be no any attracting of foreign investments...I do not take into account the announced privatization in favor of foreign friends (supporters against Russia) at knockdown (cheap) price. That would further squeeze Ukraine economy....unfortunately

[Negative] Teg: Cyprus

Nicos Anastasiades has just been re-elected for another 5 year-term. His main priority to find gas offshore at all cost. They have been drilling wells to find gas deposits for almost 3 years back. As I see the only we have is that ENI published something like very encouraging perspective. It would be great if they published real figures and cost associated with extraction in order to estimate the feasibility of this grand potential. Moreover Turkish side of Cyprus is continuously objecting any gas search works. In my humble opinion this is all-time on-going searching business and a mask to earn political capital for government team and no more.

[Negative] Teg: Russia

It is arguable but many experts are inclined to think that small and middle-scaled firms constitute the core of the economy of any country. If so, Russia is facing problems in its development, no economic dynamism, there is no environment in which we can expect innovation or entrepreneurship for such small and middle scaled business. But other experts thinks that backing on the experience of modern China and by-gone USSR they showed that the core of economy is government-linked large scale business. I think that both points of views are worth to take, but the level of corruption of Russia is very high and this is the major drawback, impediment of any possible development in Russia, excluding the military sector that is of direct control of Mr. Putin. But military sector may not balance the economy towards to a steady path of development.

[Positive] Teg: Turkey

Turkey offers a good growth potential in terms of GDP for the next two years 2018-2019 with the real rate 5% as a minimum. This is driven by governmental fiscal stimulus and the increase of export. And I read many analysts bet on strong growth dynamics of Turkish economy. Main factors are oil price growth (export), internal consumption strengthening and attraction of new foreign investments, these drivers seem to continue feeding up the economy growth, although the increase might slow down to more moderate levels in mid-term. The growth in internal consumption is also base on the clear reduction dynamic of unemployment rate. Also, many tourists are coming back (e.g. from Russia) which makes businesses to be more optimistic for near future

[Negative] Teg: Ukraine

The economy of Ukraine is predominated by politicians. In economic theory we do not possess any method to estimated growth or downfall. What we may judge on the available facts, surely, that gas pipeline system of Ukraine will suffer from other competitive routes bypassing Ukraine (Nord Stream 2 and Sooth Stream to Turkey). I witnessed that real offshore works in Baltic and Black seas are underway. Taking into account the balance of gas supply from Russia, and the planned capacity of new Streams, I would suggest that Ukraine would lost at least 80% of current capacity