The alarming rise in case rates across Europe and what they mean for the 2021 European recovery is weighing on sentiment. The good news is that we expect politicians to have largely overcome vaccine challenges this summer. Propelled by the tailwinds of better growth in 4Q20 and continued loose fiscal policy, our team remain constructive on CEEMEA growth rates in 2021.

This means that the theme of reflation could indeed make a comeback and become a pressing issue in the CEEMEA region. In fact, every country is expected to see CPI above target this year, with drivers behind those higher prices largely similar. Namely, higher core CPI, ‘re-opening’ inflation and base effects.