Bi-Weekly Report 23 January - 6 February 2017


Banking sector bottom line posts a 7-year high in FY:16, despite strong headwinds



Government repeals controversial corruption bill, following mass protests and international rebuke, but uncertainty is set to persist

The consolidated budget deficit widens markedly by 0.9 pps to 2.4% of GDP in FY:16, but overperforms compared with its target of 2.8%



President appoints interim Government and sets elections for March

The FY:16 budget records a surplus of 1.6% of GDP, mainly due to lower capital spending



Profitability of the banking system improves significantly in 9M:16, on lower provisioning for problematic loans



Domestic political impasse enters its third year

Customer deposit growth slows to a 4-year low in 2016, driven by protracted political uncertainty

Credit to the private sector loses momentum in 2016, amid an adverse political environment



An IMF mission reaches a staff-level agreement with the authorities, permitting the completion of the combined last two reviews of the 3-year Extended-Fund Facility (EFF)

Economic growth accelerates to 3.3% y-o-y in 9M:16 from 2.6% in FY:15, despite strong external headwinds



Banking sector bottom line reaches a 6-year high in 9M:16

Customer deposit growth gains momentum in 2016



The fiscal deficit narrows significantly in the first five months of the fiscal year, mainly due to deferred payments and an under-execution of capital spending

Significant fiscal consolidation required this fiscal year, in the context of the IMF-supported 3-year adjustment programme


Appendix: Financial Markets

Bi-Weekly Report 23 January - 6 February 2017