Bi-Weekly Report 30 April-13 May 2019
Turkey
Increased uncertainty, following the decision to re-run Istanbul elections
State-owned banks prevented a decline in (FX-adjusted) lending activity in Q1:19
Deposit dollarization increased sharply in Q1:19, mainly due to heightening political and economic uncertainty ahead of the end-March local elections
Romania
The 4-quarter rolling budget deficit stood at 2.9% of GDP in Q1:19, unchanged compared with Q4:18, but still marginally close to the critical EU threshold of 3.0%
The FY:19 budget deficit could reach excessive levels
Bulgaria
Higher grants from the EU and non-tax revenue pushed up (temporarily) the 4-quarter rolling budget surplus to 1.2% of GDP in Q1:19 from 0.1% in Q4:18
Bulgaria's already low gross public debt is set to decline further in FY:19
Serbia
The fiscal balance improved slightly on an annual basis in Q1:19
The expected expansionary fiscal stance in FY:19 will not reverse the downward trend of the public debt-to-GDP ratio
North Macedonia
A long period of political turbulence ends with the election of a pro-European President
A strong rebound in lending to corporates pushed overall credit growth to a 13-quarter high of 9.0% y-o-y in Q1:19
Customer deposit growth maintained momentum in Q1:19 (up 9.6% y-o-y), underpinned by the corporate segment
Albania
The IMF mission concludes Albania's second Post-Programme Monitoring review
The current account deficit continued on its downward trend, for a 4th consecutive year, narrowing to a 12-year low of 6.7% of GDP in FY:18
The CAD is set to narrow further this year and be fully covered through large FDIs
Cyprus
The banking sector turned profitable for the first time in 8 years in FY:18, supported by a sharp decline in the cost of risk and an exceptional accounting gain related to the Hellenic Bank's acquisition of Cyprus Cooperative Bank's operations
Egypt
The envisaged fiscal consolidation for this fiscal year -- 1.3 pps of GDP -- is on track
Fiscal consolidation to continue in FY:19/20 and meet its target of 1.3 pps of GDP
Appendix: Financial Markets