The economic recovery in CESEE has strengthened further in recent months, resulting in a number of additional upgrades to our growth forecasts for 2021, to 5.4% on the regional average. This good performance has been built on two important foundation stones: the adaptation of the CESEE economies...

An immigration shock has an ambiguous effect on inflation. On one hand, aggregate consumption increases with a suddenly larger population; this “demand channel” creates inflationary pressures. On the other hand, the labor market becomes more slack as immigrants search for jobs, containing...