Page 7 - BNE_magazine_05_2019

bne May 2019 The Month That Was I 7
Economics
Eastern Europe
Russia’s industrial output grew 1.2% on the year and 10.3% on the month in March after rising 4.1% and 0.4% on the month in February, the Federal State Statistics Service said. The result was a slowdown after February’s surprisingly strong result.
Russia’s budget revenues expanded another 13.2% y/y in March to RUB1.8 trillion. As in the previous two months, non-oil revenues registered the most significant growth (up 2% y/y), driven by the VAT hike, while oil and gas revenues rose 9.8%. The budget surplus was RUB0.6 trillion for the quarter.
Russia's Fx/gold reserves reached $487.8bn as of April 1 2019, accord- ing to the data by the Central Bank of Russia (CBR). This makes the highest Fx/gold reserves since March 2014, and brings the reserves back to the same lev- el they were before the sanctions regime started following Russia’s annexation of the Crimea in 2014.
Foreign Direct Investment (FDI) in the share capital of Russian non-financial sector companies in 2018 declined
by $6.5bn (outflow of $22.4bn versus inflow of $15.9bn), which makes the lowest indicator since 1997, according
to the data of the Central Bank of Russia (CBR) cited by the RBC business daily. The inflow of $15.9bn in the capital of Russian companies was 2.5-fold below the average over the past ten years, the CBR estimated.
Net outflow of capital from Russia in January - March 2019 increased 1.6 times compared with the same period last year and amounted to $25.2bn, the Central Bank reports. In the first quarter of 2018, this figure reached $16.1bn.
Central Europe
The Czech Republic’s ageing population is the main risk to long-
term fiscal sustainability, said rating agency Moody’s. The Czech Republic has an A1 positive credit rating that is supported by a low and declining debt burden as well as prudent fiscal policies, according to Moody's annual analysis.
The economies of Estonia, Latvia, and Lithuania will see lower growth rates in 2019 and 2020 but still outpace the Eurozone average, the International Monetary Fund (IMF) forecasts in its latest World Economic Outlook. Latvia will grow the fastest this year at 3.2%,
a slowdown of as much as 1.6pp against 2018. Estonia's economy is expected to grow 3% in 2019, a slowdown of 0.9pp. Lithuania is expected to post growth of 2.9%, a reduction of 0.5pp.
Eurasia
Kazakhstan’s central bank cut its policy rate by 0.25 percentage points to 9%. The regulator said the decision was made thanks to slowing inflation and a positive external environment. However, the decision may have been at least partially influenced by Kazakh Interim President Kassym-Jomart Tokayev’s ordering the central bank
to find ways to make credit more affordable.
The Russia-led Eurasian Development Bank (EDB) forecast Kyrgyzstan’s “medium-term economic growth”
at 3.5-3.9%. For 2019, the bank expects growth of 4%.
Kyrgyzstan's economy expanded by 5.3% y/y in January-March, compared to the 1.2% y/y growth recorded in the same period of last year, according to latest data released by the country's National Statistical Committee. The acceleration in growth was mostly supported by a recovery in output at the country’s flagship Kumtor gold mine.
said in a comment on the minutes of the latest central bank monetary board meeting, when the policy interest rate was maintained at 2.5%. The bank’s analysts see Romania’s central bank “turning outright hawkish” amid concerns over higher inflation.
Bulgaria's industrial production increased 6.6% y/y in February, accelerating from a revised 2.6% y/y rise in January, boosted mainly by the mining and manufacturing sectors, according to working-day adjusted statistics office data. On a seasonally- adjusted monthly comparison basis, output moved up 1.5% in February after rising by revised 3.6% in January.
The homeownership rate in the Czech Republic reached 67.5% in 2018, including 38.7% households owning
a house and 28.8% a flat, according
to the Income and Living Conditions survey released by the Czech Statistics Office. Renters and co-operative housing owners represent 19% and 7.9%, respectively.
Poland’s economy will expand by 3.8% in 2019, down from 5.1% last year, the IMF said in its latest World Economic Outlook. The IMF’s forecast puts Poland top of the emerging and developing Europe group.
Southeast Europe
While not the baseline scenario, the chances of a rate hike in Romania this year have increased, ING Romania
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