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Inflation makes booming Central Europe shine
Central Europe is at the forefront of a surge in European inflationary pressures. Poland’s inflation rate reached 4.7% in May and then slowed to 4.4% in June. Hungary’s inflation rate is the highest in the European Union, at 5.1%. Some of them are caused by transitional factors. But there are also reasons to believe that price pressures in these two countries will continue, creating potential tensions between their central banks and their free-spending nationalist governments.
This may also damage the reputation of the macroeconomic orthodoxy they carefully cultivated. The appreciation of Brussels and Berlin for their economic management making them a favoured destination for German investment helped to protect Budapest and Warsaw from stricter scrutiny of their domestic agendas, namely controlling media freedom, curbing minority rights and Politicize the judiciary. ....

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