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bne May 2018 The Month That Was I 7
Economics
Eastern Europe
Consumer prices in Russia rose by 0.3% month-on-month in Russia in March 2018, in line with previously observed weekly inflation dynamics and bringing the annual inflation rate to 2.4% versus 2.2% seen in February. Economists are expecting inflation to start rising again this year from historic lows set last year.
Russia’s manufacturing PMI put in
a marginal rise in March up to 50.6 from 50.2 a month earlier and only just above the 50 no-change mark in the IHS Markit index, a composite snap shot
of manufacturing actively based on a monthly survey.
The National Bank of Ukraine
(NBU) will keep its key policy rate unchanged at 17% after four hikes
of the rate, as "the current monetary conditions are sufficiently tight to bring inflation back to its mid-term target", the regulator said in a stateent on April 12.
Ukraine’s current account stood at a $9mn surplus in February compared to a $133mn deficit a year ago, the National Bank of Ukraine (NBU) reported on March 30. The goods trade deficit widened to $733mn from $527 in January. The deficit of trade in goods and services increased to $640mn in February from $467mn in January.
Ukraine's foreign exchange reserves declined by 1.2% month-on-month to $18.191bn in March, the National Bank of Ukraine (NBU) said in a statement
on April 6.
Central Europe
Hungary’s agricultural producer prices rose by 4.9% y/y in February, up from 2.1% growth in January, the statistics office KSH said. Hungary’s agriculture continues to be heavily dependent on EU farm subsidies.
Hungary’s jobless rate remained at a record low. The rolling average three- month jobless rate was just 3.8% in the December-February period, unchanged from the previous three-month period.
Czech GDP rose by 4.5% in 2017, marking the biggest annual expansion in the last decade. The main drivers in the first half of the year were domestic consumption and foreign demand. In the second half of 2017, investment activities helped the strong economic boom.
In 2016 Chinese investments in Czechia reached less than one-fifth of the €3.7bn President Milos Zeman promised the country would receive during the year. The failure of Czechia to secure the sums of money promised by Zeman has political as well as economic implications, as many Czechs are concerned about Chinese influence over their president.
The Lithuanian consumer price index (CPI) gained 2.7% y/y in March, shed- ding 0.8pp against the annual reading from the previous month, Statistics Lithuania said. The annual price growth in March extends the inflationary trend in the Lithuanian CPI to 27 months.
Southeast Europe
A harsh winter and a decline in invest- ments slowed growth in the Western Balkans in 2017, even though 190,000 new jobs were created in the first nine months of the year, a World Bank report said. An official from the development bank stressed that growth is highly vulner- able to both domestic and external shocks.
Bulgaria’s population continued its decline last year, numbering 7,050,034 people at the end of December, a decline of 51,825 people or 0.7% compared
to a year earlier. A UN study projects a combination of low birth rates and mass emigration will erode Bulgaria’s popula- tion by 23.4% by 2050.
Kosovo’s harmonised index of con- sumer prices (HICP) edged up 0.1% y/y in March, after being flat y/y in the previous month. The biggest annual price increase was registered for alco- holic beverages and tobacco (+1.9%).
Eurasia
Teheran halted the spiralling descent in the Iranian rial’s (IRR’s) value by making open market trading unlawful and setting a unified official foreign exchange rate of IRR42,000 to the dollar. Anxieties over Iran’s economic future in the face of unrelenting hostility from Donald Trump were a major factor in driving the rial’s open market value to more than IRR60,000. A year ago, the rate was IRR37,600.
The Kazakh tenge weakened by 4.7% against the dollar in one day (April 10) in an unmistakeable reaction to the US sanctions assault on top oligarchs in Rus- sia. The currency of Kazakhstan, a country with imperative trade and investment links to Russia, sank to as low as KZT334.
The Asian Development Bank’s Asian Development Outlook anticipates
a general slowdown across Central Asia, with the exceptions of Uzbekistan, where it expects growth to rise, and Turkmenistan, where it forecasts a flat year on year growth level.
Armenia's indicator for economic activity rose by 7.3% y/y in February. Growth of the index, narrower gauge for growth, showed from 10.2% y/y in January and 12.6% y/y in December.
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