Weekly Report 7-13 June 2016

Economic growth, albeit decelerating, remained strong at 4.8% y-o-y in Q1:16

External rebalancing continues in 4M:16, mainly reflecting a still favourable energy bill

Real GDP growth gains momentum in Q1:16, rising by 4.3% y-o-y

Economic growth maintains momentum in Q1:16 (up 3.0% y-o-y)

Profitability of the banking system improves significantly in FY:15

Real GDP growth moderates sharply to a 7-quarter low of 2.0% y-o-y in Q1:16 amid rising domestic political uncertainty

Banking sector’s bottom line weakens on an annual basis in Q1:16, due to higher provisioning

Real GDP growth reaches a 7-year high of 2.6% y-o-y in Q1:16

Headline inflation rises sharply by 2.0 pps to 12.3% y-o-y between April and May, due to higher core inflation and, to lesser extent, accelerating regulated prices

CBE to proceed with measured hikes of its policy rates by September, in an effort to contain the ongoing economic slowdown