Weekly Report 29 November - 5 December 2016


Headline inflation declines to 7.0% y-o-y in November from 7.2% in October, on the back of favourable food prices

The pace of decline in tourist arrivals slows for a second consecutive month in October, following the resumption of Russian charter flights



The centre-left PSD is expected to return to power

The profitability of the banking system improves in 9M:16, due to a slowdown in provisioning



Impressive fiscal consolidation in 10M:16, due to under-execution of capital spending and, to a smaller extent, higher tax revenue



The fiscal performance improves markedly in 10M:16, with the 12-month rolling deficit narrowing to an 8½-year low of 2.4% of GDP in October from 3.8% of GDP at end-2015



The 12-month rolling budget deficit narrows significantly to 2.7% of GDP in October from 3.5% in December, mainly due to, at least temporarily, lower capital spending



Significant fiscal consolidation in 10M:16, due to a strong tax revenue performance and expenditure restraint

Fiscal prudence to be observed in 2017 -- an election year



Headline inflation moderates to a 5-month low of -1.4% y-o-y in November from -1.2% in October, mainly due to a sharp decline in the prices of volatile fruit and vegetables

Unemployment rate reaches a 4-year low of 12.5% in 10M:16



The tourism crisis may have reached its peak in October

Suez Canal receipts weaken in 4M:16/17, due to the slowdown in global trade


Appendix: Financial Markets

Weekly Report 29 November - 5 December 2016