Bi-Weekly Report 12-25 June 2018

 Turkey

The victory of incumbent President Erdogan and his Justice and Development Party in the presidential and parliamentary elections is not sufficient to restore confidence

The unemployment rate is set to embark on an upward trend from Q2:18 following 5 consecutive quarters of decline

Romania

L. Dragnea, leader of the ruling PSD, sentenced for corruption

Albeit easing sharply, the pace of economic expansion remained strong at 4.0% y-o-y in Q1:18

Bulgaria

The profitability of the banking system deteriorated in Q1:18, due to lower pre-provision net operating income

Serbia

The IMF reached a staff-level agreement with the Serbian authorities on a 30-month (non-financing) Policy Coordination Instrument

The unemployment rate rose in Q1:18, on a strong increase in the labour force participation rate

FYROM

A provisional agreement on the "name issue" with Greece paves the way to the start of EU membership talks and joining NATO

The current account deficit stood at 1.4% of GDP on a 4-quarter rolling basis -- broadly unchanged from a 2¼-year low of 1.3% in Q4:17

House Price Index rose by a multi-quarter high of 7.2% y-o-y in Q1:18, supported by dissipated political uncertainty and brighter economic prospects

Albania

The current account deficit remained flat on an annual basis in Q1:18

The capital and financial account surplus narrowed slightly in Q1:18, but fully covered the CAD

Cyprus

Economic growth remained in the range of 3.8%-4.0%, for the sixth consecutive quarter, in Q1:18

Egypt

A new cabinet headed by newly-appointed Prime Minister M. Madbouly was sworn in before President A.-F. el-Sissi

Customer deposits (FX-adjusted) gained momentum in 8M:17/18, underpinned by strengthening confidence in the Egyptian economy and higher EGP remuneration rates

Credit to the private sector (FX-adjusted) lost momentum in 8M:17/18, on the back of higher lending interest rates

Appendix: Financial Markets