Page 7 - bne_Magazine_July_2018

bne July 2018 The Month That Was I 7
Economics
Eastern Europe
The Russian Cabinet approved a bill to gradually raise the retirement age to 65 years for men and up to 63 years for women from 60/55. A phased increase will start from 2019 with a step of six months a year running through to 2034.
Russia’s current account surplus demonstrated a two-fold increase y/y having reached $49.9bn for 5M18, according to the CBR’s preliminary estimate.
Russia's Finance Ministry has finalised the proposals on the so-called "tax manoeuvre" package of tax reforms
in the oil and gas sector. The manoeu- vring suggests a gradual reduction of the export duty rate for oil and oil products to zero over 2019-2024, while increasing oil extraction tax (MET).
The Russian government has proposed to hike the VAT rate, Prime Minister Dmitri Medvedev told the cabinet on June 14. "The value added tax rate will be changed, from current base rate to 18% we suggest to raise it to 20%," he said.
Russia’s inflation shrugged off spiking fuel prices to turn in another month of low and stable inflation. Russia's consumer price inflation came in at 0.4% month-on-month in May, flat compared to April, with year-on-year inflation remaining at 2.4%.
The European Parliament (EP) green- lighted a new €1bn macro-financial assistance (MFA) programme for Ukraine. The new assistance will cover Ukraine’s financing needs over a period of two and a half years. The European Commission also transferred a second €600mn tranche from the MFA to Ukraine in April that was delayed
from December.
Ukraine's state budget revenue increased 13.5% year-on-year to UAH369.7bn ($14.1bn), which is
0.6% below plan, the State Treasury provisionally reported on June 1. Net tax revenue improved 16.2% y/y to UAH164.5bn (0.1% below plan), while customs revenue rose 9.6% y/y to UAH125.6bn (2.8% below plan).
Central Europe
The Czech economy grew by 4.4% in the first quarter of 2018 from 5.5% growth of GDP in Q1, 2017. The growth is slightly lower than the preliminary results of 4.5%, which was already at the very bottom of the Czech National Bank’s (CNB), the finance ministry’s and the market’s expectations.
Slovak industrial production increased by 4.2% y/y in April and when seasonally adjusted, indus-
trial output rose slightly by 0.2% m/m, data published by the Slovak Statistics Office. The annual numbers were influ- enced mainly by increases in indus- trial manufacturing and mining (both by 5.2%) and quarrying (0.8%).
Latvia’s foreign trade deficit fell 9.7% on the year to €158.7mn in April, provisional data released by the country’s Central Statistical Bureau showed. The reduction in deficit owes to exports growing fast, at 15.3% y/y to €985.9mn in April, while imports managed growth of 11%, to just over €1.1bn.
Southeast Europe
The IMF warned of the risks of the Romanian economy overheating due to higher inflation and the twin deficits, as well as lagging investment and slower structural reforms. The IMF called for a tighter macro-economic policy stance.
The number of jobless people
in Macedonia declined by 4.8% y/y
to 188,105 at end of May, according to the employment agency. The jobless rate has been constantly falling in the last
few years, but the country still has one of the biggest unemployment rates in Europe.
Moldova’s headline inflation eased
to 2.8% y/y in May from 3.7% y/y in April as the food prices’ annual advance moderated to 4.2% y/y (from 6.8% y/y), the country’s statistics bureau said. This was close to the lowest inflation since 2009, and the 10%-13% cut in the electricity price as of April will further push down average consumer prices.
Tourism makes up a larger percentage of GDP in Croatia than any other country worldwide. Tourism accounted for 18.8% of its GDP, or around $9.6bn, in 2016, said a report from consultancy network UHY.
Eurasia
Georgia’s central bank held its key refinancing rate at 7.25%, anticipating that annual inflation will not stray far from its 3% target this year. It stood at 2.5% in May, unchanged in comparison with April, which saw a 0.2% m/m decline.
Kyrgyzstan’s economic growth stood at 0.7% y/y in January-May, compared to the 6.1% y/y growth recorded in the same period of 2017, according to latest data released by the country's National Statistical Committee. The World Bank noted in its latest forecasting that Central Asia is expected to see waning returns on benefits that pushed expan- sion last year.
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