Bi-Weekly Report 1-14 May 2018

Turkey

Banking sector profitability decelerated sharply in Q1:18, on the back of slowing credit activity, narrowing interest margins and rising provision charges

Romania

Tensions escalate between the President and the Government

The NBR hiked its key rate by a further 25 bps to 2.5%

Bulgaria

Lower grants from the EU and higher budget spending pushed down the budget surplus to 0.4% of GDP on a 4-quarter rolling basis in Q1:18 from 0.9% in Q4:17

Bulgaria's already low public debt is set to decline further in FY:18

Serbia

Fiscal policy stance turned expansionary in Q1:18, with the 4-quarter rolling fiscal surplus declining by 0.2 pps y-o-y to 1.0% of GDP

FYROM

Credit to the private sector maintained momentum in Q1:18 (up 5.7% y-o-y), supported by improving bank asset quality and easing liquidity conditions

Customer deposits gained momentum in Q1:18

Tourism activity picked up significantly in Q1:18 (up 21.5% y-o-y), mainly due to the normalization of the political situation

Albania

Economic growth reached a post-global crisis high of 3.8% in FY:17, supported by two large energy projects and their spill-over effects

Cyprus                                                                                     

Customer deposits declined in Q1:18, as a result of temporary pressures on the customer base of Cyprus Cooperative Bank (CCB)

Credit deleveraging accelerated in Q1:18, mainly reflecting increased efforts by banks to reduce NPLs

Tourist activity began the year on a strong footing, with growth in arrivals up to 14.7% y-o-y in March, on a 12-month rolling basis, from 13.3% in December

Egypt

FX reserves rose by USD 7.0bn to a record high USD 44.0bn in the first four months of 2018, supported by the solid implementation of the loan agreement with the IMF

Headline inflation eased further to 13.1% y-o-y in April

Appendix: Financial Markets