Page 13 - UKRRptFeb19

Buying on the Never Never
So digging a little deeper the picture is more nuanced that a cursory glance at the CPI numbers might suggest. bne IntelliNews m ade a simple “Never Never” index that combines the change cost of buying with the changing cost of borrow by adding the CPI rates to the key policy interest rates to highlight the differences.
In an ideal world the Never Never index should be around 4% (CPI of 2% plus overnight rates of 2%) and the progress most of Central Europe has made since it joined the EU is immediately apparent as nearly all the countries in that region have a Never Never index of 4% or less.
Again Turkey and Iran stand out, but the picture in Southeastern Europe is far more mixed, although non of the countries of the Balkans have excessively high Never Never index numbers, with Romania and Moldova the two exceptions.
However, all the countries of Eastern Europe and Central Asia clearly have a lot more work to do to bring their Never Never index numbers down by at least half in most cases or more.
13 UKRAINE Country Report February 2019 www.intellinews.com