Weekly Report 6-12 December 2016


Economic activity contracts by 1.8% y-o-y in Q3:16, mainly due to heightened uncertainty following the July 15th failed coup

The current account deteriorates for a third consecutive month in October



The centre-left Social Democratic Party (PSD) returns to power



Economic growth weakens slightly in Q3:16, due to the sharp drop in fixed investment



Growth reaches a high of 2.7% y-o-y in 9M:16



The outgoing coalition Government returns to power

The current account deficit widens to 2.3% of GDP on a 12-month rolling basis in September, mainly due to a sharp decline in private transfers



The European Council delays the opening of EU accession negotiations with Albania -- a candidate country since June 2014

Headline inflation rises to 1.9% y-o-y in November, due to a deterioration in core inflation and unfavourable energy prices

Risks of an overheating of the economy and increasing inflationary pressures strengthen the BoA's hand to initiate a new cycle of monetary policy tightening



GDP growth reaches an 8-year high of 2.7% y-o-y in 9M:16



Headline inflation rises sharply to an 8-year high of 19.4% y-o-y in November from 13.9% in October, following the floatation of the domestic currency and the cut in fuel subsidies

The CBE is likely to hike its policy rates further, by 200 bps, by end-March


Appendix: Financial Markets

Weekly Report 6-12 December 2016