Bi-Weekly Report 15-28 May 2018


The CBRT hiked its key policy rate sharply, by 300 bps to 16.5% at an extraordinary MPC meeting, and announced the simplification of its monetary policy framework from June 1st

The fiscal stance became more expansionary in 4M:18

The current account deficit reached a 4-year high of 6.4% of GDP on a 4-quarter rolling basis in Q1:18



The 4-quarter rolling budget deficit reached 3.4% of GDP in Q1:18, breaching the critical 3% threshold for the first time since end-2012



Lower income outflows almost compensated for the deterioration of the trade deficit, keeping the 4-quarter rolling current account surplus high at 4.3% of GDP in Q1:18

Tourism activity strengthened in Q1:18, sustaining economic growth and the current account surplus



The current account deficit reversed its upward trend, moderating to 5.4% of GDP, on a 4-quarter rolling basis, in Q1:18 from 5.7% in Q4:17



Banking sector net profit more than doubled in Q1:18, mainly due to sizeable income from a reversal of provisions



The IMF concludes Albania's first Post-Programme Monitoring review, recommending larger and front-loaded fiscal adjustment

A broadly neutral fiscal stance in Q1:18



Buoyant tax revenue and strict spending control brought the fiscal surplus up to 2.4% of GDP, on a 4-quarter rolling basis, in Q1:18 from 1.8% in Q4:17

Real estate prices posted their first increase in 9 years in FY:17 (up 1.1%)



The unemployment rate is on track to reach an 8-year low of 11.2% in FY:17/18

The IMF and the Egyptian authorities reached a staff-level agreement on the 3rd review of Egypt's economic reform programme -- supported by a 3-year USD 12bn Extended Fund Facility

S&P upgrades Egypt's sovereign credit rating by one notch to B (5 notches below investment grade)


Appendix: Financial Markets

Bi-Weekly Report 15-28 May 2018