Southeastern Europe & Mediterranean Emerging Market Economies: Bi-Weekly Report 26 April - 9 May 2022

BULGARIA
Russia suspends natural gas deliveries to Bulgaria
The evolving geopolitical and energy crisis weighs on Bulgaria’s economic outlook


ALBANIA
Following an outstanding performance in FY:21 (GDP, up 8.5%), economic growth is set to moderate to (a still sound) 3.0% this year, reflecting the implications of the Russia-Ukraine crisis, as well as the elimination of favourable base effects related to post-2019 earthquake reconstruction activity and COVID-19 recovery as well as the previous year’s (weather-induced) spike in renewable energy production
Amid mounting inflationary pressures, the BoA proceeded with a 50 bp hike in its 1-week repo rate (to 1.0%), bringing it back to pre-COVID-19 levels


CYPRUS
The banking sector remained in “the red” in FY:21, with losses, however, decreasing compared with FY:20, in line with lower -- yet still sizeable (due to the continuing cleaning-up of the sector’s balance sheet) -- provisioning charges
Banks’ profitability should remain under pressure in FY:22, in view of the challenging economic outlook


APPENDIX: 
DETAILED MACROECONOMIC DATA
REGIONAL SNAPSHOT: MACROECONOMIC INDICATORS & FINANCIAL MARKETS