Southeastern Europe & Mediterranean Emerging Market Economies: Bi-Weekly Report 21 April - 4 May 2026

NORTH MACEDONIA
Resilient net interest income, amid elevated interest rates, and a drop in provisioning, due to improving credit quality, pushed banks’ profitability to new record highs in FY:25
Looking ahead, slower credit expansion, combined with a pick-up in provisioning needs, amid heightened broad-based uncertainty, are expected to lead profitability to more moderate levels over the forecast horizon, despite higher-for-longer interest rates

ROMANIA
The collapse of the coalition Government heightens risks to Romania’s already fragile growth outlook, complicates its fiscal  consolidation path, and thus raises concerns regarding its investment grade status
Before the political crisis, Romania was expected to post subdued growth in 2026 amid ongoing fiscal consolidation, while the subsequent energy shock was expected to have only a limited direct impact, given its relatively high energy self-sufficiency

BULGARIA
Former President Radev’s new political formation secures an outright Parliamentary majority in the April election, raising expectations of an end to a prolonged period of political uncertainty
High political uncertainty in recent years has constrained policymaking, eventually weighing on economic growth, primarily through persistent under-investment
A stable political environment is a sine qua non condition for ensuring policy predictability and bolstering structural reform momentum

APPENDIX:
DETAILED MACROECONOMIC DATA
REGIONAL SNAPSHOT:  
        MACROECONOMIC INDICATORS