Bi-Weekly Report 20 February - 5 March 2018


The CBRT keeps its key monetary policy instrument on hold at 12.75%

The current account deficit widened by 1.7 pps to a 4-year high of 5.5% of GDP in FY:17, due to a sharp rise in gold imports and an unfavourable energy bill



Political uncertainty heightened following the Government's bid to remove the head of the anti-corruption authority

The current account deficit rose to 3.6% of GDP in FY:17 from 2.1% in FY:16, on the back of stronger domestic demand



Stronger domestic demand and a higher energy bill reduced the current account surplus to a still impressive 3.9% of GDP in FY:17 from 5.3% in FY:16

Tourism activity remained strong in FY:17, sustaining economic growth and the current account surplus



Impressive fiscal consolidation of 2.5% of GDP in FY:17, with the Budget turning from a deficit into a surplus.

The 2018 Budget is set to overperform its deficit target of 0.7% of GDP -- for a 4th successive year -- by a wide margin



The current account deficit narrowed sharply by 1.4 pps to a 3-year low of 1.3% of GDP in FY:17



The banking sector's bottom line strengthened markedly in FY:17, with ROAE returning to double digits



Fiscal consolidation continued for a 3rd consecutive year, with the fiscal surplus rising to 1.9% of GDP in FY:17 from 0.5% in FY:16

The 2018 Budget is set to overperform its target of a surplus of 1.3% of GDP by an estimated 1.3 pps of GDP



The unemployment rate fell below 12%, for the first time in 6½ years, in H1:17/18 (11.6%)

FX reserves rose by USD 5.5bn to a record high of USD 42.5bn in the first two months of 2018, supported by the solid implementation of the loan agreement with the IMF (signed in November 2016)


Appendix: Financial Markets

Bi-Weekly Report 20 February - 5 March 2018

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