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bne May 2017 The Month That Was I 7
Economics
Central Europe
Manufacturing purchasing manag- ers' indices in Central Europe failed
to improve in March, but still remain robust, thanks to expanding confidence in the Eurozone, the source of the bulk of demand for Central Europe’s facto- ries. Poland’s PMI reading dropped 0.7 point to stand at 53.5; the Czech Repub- lic, meanwhile, dropped 0.1 point from February’s 19-month high to 57.5; while Hungary fell 3.5 points to 56.0 in March.
Slovak unemployment accelerated
its fall in the third month of 2017. Joblessness stood at 8.04% in March, a drop of 0.25pp on a monthly basis and a full 1.85pp in annual terms.
Slovakia’s EU-harmonised index of consumer prices (HICP) gained 1% on the year in March, confirming the step back in price growth following the surge around the turn of the year.
Czech unemployment dropped 0.3pp m/m to 4.8% in March, data released by the labour ministry showed. On an annual basis, joblessness fell 1.3pp.
Czech inflation was strong again in March, rising 0.1pp to 2.6% y/y, statistics office CZSO reported. The CPI was flat on a monthly basis, following gains of 0.8% in January and 0.4% in February.
Polish unemployment fell 1.7pp y/y to 8.2% in March. In monthly terms, the rate of joblessness fell 0.3pp in March. The unemployment level now stands at its lowest point in 26 years, the ministry said.
Polish core inflation gained 0.6% y/y in March, the National Bank of Poland announced. The reading is 0.3pp higher compared to February. The headline CPI reading dropped to 2% in March, suggesting the recent inflation surge is weakening, and supporting doves at the National Bank of Poland.
Polish industrial production expand- ed 11.1% y/y in constant prices in
March. Coupled with shockingly good data on construction output – which boomed 17.2% y/y – the data suggest that the Polish economy boomed in the first quarter of the year. The positive outlook is strengthened by good retail sales data as well, which grew 7.9% y/y at constant prices in March.
Southeast Europe
Romania’s unemployment rate fell to 5.9% last year from 6.8% in 2015, while the occupancy rate increased, the coun- try’s statistics office reported.
Romanian consumer prices edged up 0.1% m/m in March after the 0.1% m/m decline in February, but the annual rise remained constant from last month at 0.2% y/y.
Eastern Europe
Retail trade turnover in Russia declined by only 0.4% y/y. Together with the improvement of income and employment statistics, this is good news for consumer demand, which has been consistently lagging behind the modest output recovery in the Russian economy.
Net capital outflow from Russia’s private sector amounted to $15.4bn in the first quarter of 2017, according to the flash estimates of the Central Bank of Rus- sia (CBR). The capital outflow increased notably compared with $8.8bn seen for the same quarter of 2016, mostly due to higher outflow in the banking sector. Other real sectors have been net importers of capital in the reporting quarter, the CBR noted.
The Consumer Price Index in Russia rose 4.3% y/y in March, down from 4.6% y/y growth seen in February and 5.0% in January. The trend led the Cen- tral Bank of Russia (CBR) to cut the key interest rate to 9.75% at its latest policy meeting of March 24 after holding the rate at 10% since August.
Russian manufacturing continued
its strongest expansion since 2011
in March with the Markit PMI score of 52.4, almost the same as the previous month’s 52.5, while positive sentiment amongst Russian manufacturers reached a 22-month high.
Russia’s informal or grey economy has grown to its largest extent in 11 years, employing 15.4mn people or 21.2% of all employed Russians as of end of 2016. Since 2011, the informal sector of the economy has been growing and added an estimated 4mn people, including 0.5mn people in 2016 alone, according to the estimates.
Eurasia
Kazakh consumer price inflation in Kazakhstan slowed to 7.7% y/y in March against the 15.7% y/y seen in March 2016. In line with the expected easing, the central bank cut its key inter- est rate by one percentage point to 11% at its last meeting, in February. It has cut its rate by a cumulative 600 basis points since it started its easing cycle in May 2016.
Kazakhstan’s industrial output grew 5.8% y/y in the first quarter, latest data from the State Statistics Commit- tee shows. The rise marks a continued recovery from a downward trend in Kazakh production, driven by a 5.2% y/y recovery in the hydrocarbons sec- tor, where low oil prices in 2016 made production unprofitable at some of the country’s oilfields.
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