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Public Finances Are CEE Sovereigns’ Main Vulnerability to Iran Conflict

Central and eastern European (CEE) sovereigns’ limited fiscal buffers could result in downward rating pressure in a prolonged energy price shock from the Iran conflict, Fitch Ratings says. While diversified energy sources, generally low inflation and limited external imbalances give some space for policymakers to provide temporary support, a prolonged shock could exacerbate existing fiscal vulnerabilities. [....]