Weekly Report 6 - 12 September 2016

GDP growth declines to 3.1% y-o-y in Q2:16 from 4.7% in Q1:16

External rebalancing continues in 7M:16, reflecting a still favourable energy bill

Real GDP growth reaches a post-crisis high of 6.0% y-o-y in Q2:16

Economic growth maintains momentum in Q2:16 (up 2.9% y-o-y)

Profitability of the banking system improves significantly in Q1:16

Profitability of the banking sector deteriorates slightly in Q2:16, due to higher provisioning

Parliamentary approval of the vetting bill -- key to the implementation of the country’s judiciary reform -- increases the country’s chances of opening EU accession talks

Real GDP growth reaches a 7½-year high of 2.9% y-o-y in Q2:16

Headline inflation rises sharply by 1.5 pps to 15.5% y-o-y between July and August, due to higher core inflation and a significant adjustment in regulated electricity prices

CBE to proceed with measured hikes of its policy rates by end- H1:16/17, in an effort to contain the sharp economic slowdown