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bne December 2017 The Month That Was I 7
Economics
Eastern Europe
Investment flows among Eurasian Economic Union member countries leapt by 15.9% in 2016 after three con- secutive years of decline. The year saw total mutual FDI stock within the bloc reach $26.8bn, says a new report from the Eurasian Development Bank.
Russia’s industrial output stalled in October failing to show growth for the first time since March and posting 0% year-on-year growth and slipping by 0.1% in month-on-month seasonally adjusted terms, the Rosstat agency said.
Russia’s GDP growth disappointed by decelerating in Q3 to 1.8% y/y from 2.5% y/y in the second quarter, accord- ing to Rosstat. The released estimate
is considerably lower that the flash estimates made by the economy ministry earlier of 2.2% y/y.
Russia's Consumer Price Index (CPI) in October fell again to an extraor- dinary low of 2.7% year-on-year down from the already low 3% seen in September. Inflation has strongly over- shot the Central Bank of Russia (CBR) target of 4% set for 2017.
Ukraine's foreign exchange reserves increased by $98mn, or 0.5% month- on-month to $18.736bn in Septem- ber, or 3.7 months of import cover, according to National Bank of Ukraine. The result was due to the placement of local Eurobonds ($170.3mn) and swap operations (worth $100mn).
Ukraine's parliament, the Verkhovna Rada, greenlighted the nation's state budget for 2018 in the in first read- ing. The budget deficit target for 2018 is 2.4% of GDP, real GDP growth is
3% year-on-year and inflation it 7%.
Central Europe
Poland’s economy will expand 4% in 2017 on the back of robust consump-
tion fuelled by a strong labour market and government child payment scheme, the World Bank said. The forecast is an upward revision by 0.7pp compared to the World Bank’s previous prediction from May.
Hungarian gross wages grew at the fastest pace in more than a decade
in August, rising 13.2% to stand at HUF292,400 (€949). The shortage of labour has been exerting an upward pressure on wages, which remain below the CEE average.
Eurasia
Kazakhstan’s bilateral trade with EEU members (Russia, Belarus, Kyrgyzstan and Armenia) grew by 30% y/y to $12.37bn in the first nine months of this year. Exports rose 33.9% y/y to $3.72bn, while imports expand- ed 28.4% y/y to $8.66bn.
Georgia's consumer price inflation edged up to 6.4% y/y and 0.8% m/m in October exceeding the state target of 4% and reflecting exchange rate insta- bility. The Georgian lari had been appre- ciating since January but since Sep- tember it has returned to depreciation.
Mongolia’s trade surplus expanded 64.2% y/y to $1.5bn in the first nine months amid increased demand for commodities in China, its main trade partner. Exports surged by 37.5% y/y to $4.6bn mainly thanks to higher Chinese orders for Mongolian coal shipments.
Kazakhstan’s economy grew by 4.3% y/y in the first nine months. Growth measured 4.2% in the first half. GDP expansion in 2016 was just 1%.
Economic Forecast. The economy should grow by 3.9% this year and by 3.8% in 2018. The EBRD also raised its fore- cast for Bulgaria’s real GDP growth to 3.5% in 2017.
The European Commission (EC) raised its GDP forecast for Albania for 2017 by 0.3% to 4%, due to the expected boost of foreign direct investment (FDI),
the EC said in its Autumn European Economic Forecast.
Czech consumer price inflation hit
a five-year high in October rising by 0.5% on a m/m basis bringing the rate to 2.9%. The year-on-year inflation rate is now the highest since October 2012.
Estonia is to replace Latvia as the fast- est growing economy in the Baltics, this year according to the European Commission’s prediction in its Autumn Economic 2017 Forecast. It predicts Estonia’s economy is likely to register 4.2% this year and Latvia’s 3.8%.
Southeast Europe
All the Western Balkan countries, except Bosnia, restored employment to its level before the crisis in 2008 with around 230,000 jobs being created in 2017, the World Bank said. The region has relatively high unemployment levels with youth unemployment being par- ticularly high.
Romania’s currency fell to its weak- est level against the euro since 2012. The leu dropped to nearly RON4.65 to the euro on November 13, and funda- mentals show that unless a strong inflow of transfers from the European Union budget occurs in the coming quarters, the local currency will weaken further.
Growth projections for Bulgaria were improved significantly by the Europe- an Commission (EC) in 2017 and 2018 in the autumn edition of the European
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