Bi-Weekly Report 12-25 March 2019


GDP growth declined sharply to a post-global financial crisis low of 2.5% in FY:18 from 7.4% in FY:17; a further slowdown is in sight this year

The unemployment rate reached a 9-year high of 11.0% in FY:18 and is set to rise to a post-global financial crisis high of 12.0% this year



Economic activity remained strong in Q4:18 (up 4.1% y-o-y), albeit losing momentum

Economic growth is set to slow in FY:19



The Bulgarian economy maintained momentum in Q4:18

GDP growth is set to rebound in FY:19, underpinned by a looser fiscal stance

The labour market shows signs of stagnation



The underlying current account deficit (excluding energy) narrowed markedly to 0.7% of GDP in FY:18 from 1.4% in FY:17

The capital and financial account improved markedly and more than covered the CAD in FY:18


North Macedonia

The Central Bank lowered its key rate by 25 bps, to an all-time low of 2.25%

GDP growth rebounded to 2.7% in FY:18 from a 5-year low of 0.2% in FY:17, supported by both domestic and external demand

Labour market conditions tightened further in FY:18, underpinned by stronger economic activity and active labour market policies



The FY:18 deficit narrowed to a record low of 1.6% of GDP and overperformed its target of 2.0% of GDP

The 2019 Budget is set to underperform its target of 1.9% of GDP this year, unless additional corrective fiscal measures are introduced



GDP growth slowed to a still strong 3.9% in FY:18 from an upwardly-revised 4.5% in FY:17, due to weaker domestic demand

GDP growth is expected to moderate further to a still strong 3.6%

The unemployment rate returned to single digits, reaching a post-crisis low of 8.4% in FY:18



The envisaged fiscal consolidation for this fiscal year -- 1.9 pps of GDP -- is on track

Headline inflation rose to a 4-month high of 14.4% y-o-y in February from 12.7% in January, mainly on the back of accelerating volatile prices of fruit & vegetables

The CBE is likely to cut its key policy rates by 200 bps by end-2019


Appendix: Financial Markets

Bi-Weekly Report 12-25 March 2019