Bi-Weekly Report 6 - 19 November 2018


External rebalancing intensified in September, with the 12-month rolling current account deficit narrowing to 5.8% of GDP from 6.5% in August

The seasonally-adjusted unemployment rate rose for a 2nd consecutive quarter in Q3:18, reaching a 5-quarter high of 11.2%

Turkey rose fourteen places to 43rd in the World Bank's Ease of Doing Business ranking for 2019



Headline inflation reached 4.3% y-o-y in October against 3.3% at end-2017, due to higher energy prices and (to a lesser extent) stronger domestic demand

The NBR needs to raise rates further to attenuate overheating pressures



Stronger tax revenue offset pressures on current spending and public investment, keeping the 4-quarter rolling budget surplus at 0.9% of GDP in Q3:18, broadly unchanged compared with the Q4:17 outcome

Fiscal policy is set to become more expansionary in FY:19



Serbia's competitiveness improved in 2018

FX-adjusted customer deposit growth accelerated in 9M:18, reaching 8.3% y-o-y in September, on the back of strengthening economic activity

Credit growth (adjusted for FX movements) accelerated in 9M:18, reaching an 8-year high of 6.9% y-o-y in September, despite continued large write-offs



Banking sector net income rose sharply in 9M:18, by 66.2% y-o-y to an all-time high of EUR 125.0mn (1.2% of GDP)

FYROM ranked 10th out of 190 countries in this year's World Bank's Ease of Doing Business 2019 Report



The banking sector's ROAE weakened on an annual basis to a still solid level of 12.9% in 9Μ:18



Customer deposits declined in 9M:18, due to increased depositor uncertainty in H1:18

Real estate prices maintained their momentum in Q2:18

Cyprus fell 3 places to 57th in the World Bank's Ease of Doing Business Ranking 2019



The FY:18/19 fiscal deficit is set to miss its target of 8.4% of GDP, due to higher-than-budgeted interest payments and energy subsidies

The CBE is likely to remain in a "wait-and-see" mode until the ongoing emerging market volatility eases

Egypt rose nine places to 120th in the World Bank's Ease of Doing Business ranking for 2019


Appendix: Financial Markets

Bi-Weekly Report 6 - 19 November 2018