EM Edge Data Watch: When the information changes, we alter our conclusions

Research evidence excerpt

EM Edge Data Watch: When the information changes, we alter our conclusions

aining likely.

which remains our baseline.

In Vietnam, lower oil prices (and related chemical input

The tension is different in Kazakhstan: lower oil prices are costs) improve the inflation outlook by lowering headline

expected to weigh on the Tenge through a wider CAD at inflation, but the near-term external picture is mixed due to

1.7% of GDP, adding upside risks to the inflation outlook. import dynamics. The benefit from cheaper oil is partially

This argues for a more cautious pace of easing by the NBK. If offset by a deterioration in the trade balance, driven by higher

depreciation pressures persist and are not managed (through electronics imports. The improvement will become more visi-

“extra” gold mirroring), imported inflation could re-acceler- ble in 2027 as lower oil persists and tech import demand nor-

ate and undermine confidence in the disinflation path. As malizes. Core inflation remains stickier given projected fiscal

opposed to Kazakhstan, the CA surplus will remain in place, easing. Lower oil prices have less direct impact on Mongo-

even if lower, in Azerbaijan. Consequently, there are no lia’s external accounts and inflation. The improved current

implications for monetary or FX policy. account forecast is better explained by our forecast of higher

copper prices.

On the external side, lower oil prices will improve current

accounts in Georgia, Serbia, and Ukraine this year and in Figure 4: 2026 inflation forecasts

2027. For Serbia, despite the improvement, the central bank is %oya Current Early June End Feb

still likely to act as a net FX seller. In Georgia the robust FDI 18

inflows against improved CA balance are expected to support 16