Page 7 - bne Magazine Apri20

bne April 2020 The Month That Was I 7
Economics
Eastern Europe
Russia's IHS Markit believes that global growth will slow down to 1.7% in 2020 versus the previous estimate
of 2.5%, recovering to 2.7% in 2021. "Few, if any, countries or industries will be immune to [the] economic impact" of the global spread of the coronavirus, IHS Markit said. Russia is expected to see GDP growth decline to 0.8% in 2020, down from 1.1% in 2019 and 2.2% in 2018.
Russia could start sales of foreign currency should oil prices remain below the $42 per barrel threshold
of the so-called budget rule regulating the country's spending, according to an announcement by the Finance Ministry. Russia’s reserves in the National Welfare Fund (NWF) of $150bn are “sufficient to cover lost revenue if oil prices drop to $25 to $30 a barrel for six to ten years,” the Finance Ministry said.
Ukraine’s banks were running short of dollars in mid-March as panic buying spread in the wake of the escalating coronavirus pandemic. The National Bank of Ukraine (NBU) pumped $1bn
of cash into the market in the same week to stabalise the currency.
Ukraine’s goods trade balance was back in the black after posting
a surplus of $140mn in January from a $1.3bn deficit in the prior month. The trade balance has been improved by the current crisis as energy prices fall and the devaluation of the hryvnia depresses imports.
The Belarusian ruble fell to an all- time low against the US dollar and euro during March 9's trading session on the Belarusian Currency and Stock Exchange (BCSE).BYN stood at 2.3518 for one dollar.
Central Europe
Poland’s industrial production grew 4.9% y/y in unadjusted terms in
February, after expanding 1.1% y/y the preceding month, Poland’s statistical office GUS reported on March 19. The result beats market consensus, marking the last normal month of industrial activity before the coronavirus outbreak currently slowing down the European economy to a long-unseen extent.
The Czech government has approved an increase in the budget deficit from CZK40bn (€1.4bn) to CZK200bn (€7.2bn) as an amendment to the State Budget Act at the government meeting on March 23, due to the impact of the coronavirus (COVID-19) outbreak on the Czech economy.
Czech confidence in the economy decreased in March at the fastest pace since 2011, reaching the lowest level since 2013. The economic sentiment indicator fell by 3.2 percentage points (pp) to 94.4 month on month, in all segments except construction.
Hungarian GDP may have increased by 2-3% in Q1 but in the following quarter it may plunge 20% due to the almost complete shutdown in the service sector and suspension of production
in the vehicle industry, according to a forecast by economic researcher GKI.
Hungary recorded its first current account deficit in years of €775mn in Q4, which brought the full-year figure to a €1.2bn deficit, according to data from the National Bank (MNB).
Southeast Europe
The European Union has pledged financial help amounting to a total of €411mn for the six Western Balkan countries in their efforts to fight the coronavirus (COVID-19) pandemic,
EU Enlargement Commissioner Oliver Varhelyi said on March 25.
The European Union has allowed Serbia to use €94mn funding that had been provided under the Instrument
for Pre-Accession Assistance (IPA) to prevent the spread of the coronavirus outbreak, the government said in
a statement on March 25.
Serbia hopes to post an economic contraction of up to 2% in 2020
due to the coronavirus (COVID-19)- related restrictions, To reduce the negative impact of the restrictions, the government will provide €2.5bn to help private companies.
Romania’s GDP could plunge by as much as 7% this year, under the worst case scenario compiled by BRD-SocGen. Under the best-case scenario, the GDP would still decline by 0.5%. Under the baseline scenario, Romania’s GDP would drop by 3.9% this year.
Bulgaria’s Prime Minister Boyko Borissov said the government has mobilised BGN4.5bn (€3.2bn) to help the economy tackle the consequences of the coronavirus (COVID-19) outbreak.
Eurasia
Turkey can expect the worst annualised growth collapse in the second quarter of any emerging market, at 17.2% q/q, given the crippling economic impact of the coronavirus (COVID-19) pandemic, JPMorgan warned on March
Fitch cut its outlook for average prices for the Brent blend for 2020 from $62.5 per barrel to $41/bbl and its 2021 forecasts from $60/bbl to $48/bbl respectively.
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