Bi-Weekly Report 26 June - 9 July 2018
Turkey
President Erdogan was sworn in for another five-year term, with substantially expanded powers
President Erdogan names a new cabinet as Turkey moves to an executive presidency
Headline inflation rose sharply to a 14-year high of 15.4% y-o-y in June, mainly due to stronger food inflation and weaker domestic currency
Romania
Political uncertainty increases
The NBR maintained its key rate flat at 2.5%
Bulgaria
United Patriots: the weakest link in the ruling coalition
Leading indicators point to stronger economic growth in Q2:18
Serbia
FX-adjusted customer deposit growth accelerated in 5M:18, reaching 8.9% y-o-y in May, on the back of strengthening confidence in the domestic economy
Credit growth (adjusted for FX movements) accelerated in 5Μ:18, reaching a 6-year high of 6.4% y-o-y in May, despite continued large write-offs
FYROM
FYROM to receive a start date for EU accession talks in June 2019, conditional on further progress on reforms and the implementation of the name agreement with Greece
The 12-month rolling fiscal deficit narrowed to 2.5% of GDP in May from 2.8% in December, mainly on under-executed capital spending
Albania
A starting date for EU accession talks to be granted in June 2019, conditional on continued progress in reforms
Economic growth strengthened in Q1:18 (up 4.4% y-o-y), mainly due to buoyant electricity production
Cyprus
Headline inflation rose temporarily to a 5¾-year high of 2.3% y-o-y in June from -0.6% at end-2017
The current account deficit narrowed sharply to 3.3% of GDP on a 4-quarter rolling basis in Q1:18 from a 7-year high of 6.7% in Q4:17, mainly due to an improvement in the ship trade balance
Egypt
The current account deficit is estimated to have narrowed sharply to 2.8% of GDP in FY:17/18 (July 2017-June 2018) from a 2½-decade high of 6.5% of GDP a year earlier
The capital and financial account, excluding IFI support, is estimated to have comfortably covered the CAD and boosted FX reserves in FY:17/18
Appendix: Financial Markets