- We retain our bullish near-term outlook on Kazakhstan oil production, forecasting total liquids output to rise by 5.1% y-o-y in 2022 and 4.3% in 2023. Additional investments will be needed to sustain positive growth rates over the long run.
- Growth in 2022 will be weaker than initially targeted by the government, reflecting temporary maintenance works and production outages upstream, as well as urgent repair works ongoing at the Caspian Pipeline Consortium’s Black Sea export terminal.
- We see meaningful downside risk to the forecast stemming from the Ukraine war, given that Russia has control of Kazakhstan’s key export route
- We at Fitch Solutions have revised up our real GDP growth forecasts for Croatia from 4.6% to 6.5% for 2022, down from 10.2% in 2021. This reflects a strong rebound in the tourism industry, which accounts for 20% of GDP.
- However, we forecast that growth will slow to 2.0% in 2023 (down from a prior 2.5% projection), owing to high inflation weighing on consumption, while external demand for travel to Croatia is weighed down by rising living costs across Europe.
- Risks to our forecast are tilted to the downside, given the potential for inflation or negative spillover effects from the war in Ukraine to exceed our expectations
Key View: Growth in real household spending in Italy will decelerate in 2022 and 2023 from a high 2021 base, as economic growth slows and consumers feel the effects of rising inflation. We believe the true impact of a weaker economic environment will be felt over H222 and H123, as household savings are diminished and consumers grapple with significantly higher utility costs, while nominal wage growth stalls.
Outlook For 2022 And 2023
We forecast real household spending to rise by 3.2% in 2022, as favourable base effects wane off and the reopening of tourism feeds through into greater household spending. However, the realities of a
- Demand for new vehicles in Romania will remain robust in 2022 and in the medium term as higher than average economic output versus EU regional peers will support demand for high value goods such as cars.
- EV sales will benefit from one of the highest incentive structures globally as individuals are subsidized to opt for zero-emission vehicles while replacing their older cars via the Rabla Classic and Rabla Plus scrappage scheme.
We at Fitch Solutions believe total new vehicle sales in Romania will return to growth in 2022 following two years (2020-2021) of contracting sales as economic output remains robust in a
- At Fitch Solutions, we forecast the Belarusian economy to contract by 6.0% in 2022, followed by a further 1.5% contraction in 2023.
- Elevated inflation and supply-chain disruptions caused by Western sanctions will limit household consumption and although total exports will decline, we expect trade with Russia to increase.
- Over the remainder of our 10-year forecast period, we expect the economy to average annual growth of 1.5%, compared to an average of 4.4% across EMs globally.
The Belarusian economy will experience two consecutive years of recession in 2022 and 2023 as a result of western sanctions and its exposure to
- The ongoing energy and cost of living crisis remains the main source of political risk in Austria.
- Public support for sanctions on Russia could erode in the months ahead, though we believe that the Conservative-Green coalition will likely block the FPÖ’s push to put European sanctions support to a referendum.
- President Alexander Van der Bellen will likely secure a second term, boding will for political stability over the coming years.
The ongoing cost of living crisis will remain a key source of political risk in Austria. Though inflation recently eased to 9.1% y-o-y in August, from a 47-year high of 9.3% y-o-y in July
- Spain’s pharmaceutical industry calls for reform as the country lags behind regional peers in access to innovative medicines.
- The country’s complex and recently modified HTA system will continue to incur delays if its not updated.
- While Spain’s strong emphasis on encouraging innovation will incentivise them to address the proposed measures, we expect a focus on cost containment will drive increasing usage of HTA.
Pharmaceutical industry raise concern with delays in market access. In July 2022, Spain’s pharmaceutical industry association, Farmaindustria, published a document outlining various proposals to Spain’s
- We at Fitch Solutions believe that the ruling Socialist Party is well positioned to maintain stability amid the present spell of rising prices.
- We are maintaining Portugal’s Short-Term Political Risk Index score of 75.6 (higher score implies lower risk).
- However, we note several challenges for the administration in the coming years, including a 2023 growth slowdown, the impact of climate change and a struggling health system, which all pose upside risks to fiscal expenditures and downside risks to growth.
We at Fitch Solutions believe that the ruling Socialist Party (PS) is well positioned to maintain stability amid the