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Bi-Weekly Report 30 April-13 May 2019

17/05/2019 - Reports

Southeastern Europe and Mediterranean Emerging Market Economies; --Weekly Report

Turkey

Increased uncertainty, following the decision to re-run Istanbul elections

State-owned banks prevented a decline in (FX-adjusted) lending activity in Q1:19

Deposit dollarization increased sharply in Q1:19, mainly due to heightening political and economic uncertainty ahead of the end-March local elections

        

Romania

The 4-quarter rolling budget deficit stood at 2.9% of GDP in Q1:19, unchanged compared with Q4:18, but still marginally close to the critical EU threshold of 3.0%

The FY:19 budget deficit could reach excessive levels

        

Bulgaria

Higher grants from the EU and non-tax revenue pushed up (temporarily) the 4-quarter rolling budget surplus to 1.2% of GDP in Q1:19 from 0.1% in Q4:18

Bulgaria's already low gross public debt is set to decline further in FY:19

        

Serbia

The fiscal balance improved slightly on an annual basis in Q1:19

The expected expansionary fiscal stance in FY:19 will not reverse the downward trend of the public debt-to-GDP ratio

        

North Macedonia

A long period of political turbulence ends with the election of a pro-European President

A strong rebound in lending to corporates pushed overall credit growth to a 13-quarter high of 9.0% y-o-y in Q1:19

Customer deposit growth maintained momentum in Q1:19 (up 9.6% y-o-y), underpinned by the corporate segment

        

Albania

The IMF mission concludes Albania's second Post-Programme Monitoring review

The current account deficit continued on its downward trend, for a 4th consecutive year, narrowing to a 12-year low of 6.7% of GDP in FY:18

The CAD is set to narrow further this year and be fully covered through large FDIs

 

Cyprus

The banking sector turned profitable for the first time in 8 years in FY:18, supported by a sharp decline in the cost of risk and an exceptional accounting gain related to the Hellenic Bank's acquisition of Cyprus Cooperative Bank's operations

 

Egypt

The envisaged fiscal consolidation for this fiscal year -- 1.3 pps of GDP -- is on track

Fiscal consolidation to continue in FY:19/20 and meet its target of 1.3 pps of GDP

 

Appendix: Financial Markets