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bne June 2018 The Month That Was I 7
Economics
Eastern Europe
After dipping to an eight-month low in March, Russia’s IHS Markit services PMI index put in a strong rise in business activity across the Russian service sector in April. The Russia Services Business Activity Index posted 55.5 in April, up from 53.7 in March, indicating a strong output upturn and well ahead of the 50 no-change mark.
The net capital outflow from Rus- sia exceeded the full year forecast in first four months of this year after it increased to $21bn from $17.9bn in January-April 2018 against the same period of last year, according to the Central Bank of Russia (CBR).
According to preliminary data of Rosstat for 2017, the poverty level increased in 44 regions out of 71. Poverty declined in 22 subjects, in another five it remained at the level of the previous year. The number of people living below the poverty level in the third quarter of 2017 as compared with the same period in 2016 increased from 18.8mn to 19.2mn people, its share from 12.8% to 13.1%.
Ukraine's GDP grew by 3.1% in Janu- ary-March 2018 y/y, the State Statistics Service of Ukraine reported on May 15. The country's economy grew by 0.9% compared with the previous quarter.
Real wages in Ukraine in March 2018 compared to March 2017 increased
by 9.5%, compared to February 2018 by 5.9%, the State Statistics Service has said. The average nominal wage of full- day workers in March 2018 compared to February 2018 increased by 7.1%.
Central Europe
The Estonian trade deficit increased 60.6% y/y to €228mn in March, Statistics Estonia reported. Exports fell 3% y/y to over €1.1bn, while imports expanded 4% y/y to nearly €1.4bn.
The gap is due to weakening external demand and the still strong internal demand.
The Czech unemployment rate is the lowest in the region and fell to 3.2% in April, a drop of 0.3 percentage points (pp) m/m in line with market expectations and signalling an even tighter labour market, data released by the Czech Labour Office.
The slowdown in Czechia's industrial production in March was the worst fall since 2016, after it fell by 1.1% y/y, in a surprise result for the market. The indus- trial production decline has been largely driven by the weaker performance of the automobile sector.
Hungary’s budget deficit hit 80% of this year’s target already in April and amounted to HUF209bn (€664mn), taking the first four months’ deficit to HUF1.08 trillion, of the HUF1.36 trillion full-year target. Budget spending accel- erated in the first part of the year in the run up to elections.
The Polish unemployment rate came in at 6.3% in April, a drop of 1.3pp y/y and has been tightening unabated since early 2014. Increasing employment is a core feature of Poland’s economic recovery.
Southeast Europe
Serbia’s GDP growth accelerated to 4.5% at the end of the first quarter, President Aleksandar Vucic announced. This represents an upturn from 2017, when the agricultural sector was hit by drought.
Bulgaria’s domestic industrial pro- ducer prices increased 4.8% y/y in March, after rising 4.4% y/y in Febru- ary. Annual PPI growth has been positive for 16 consecutive months.
Croatian Tourism Minister Gari Cap- pelli warned of a significant labour shortage in the sector. The number of
vacant jobs in the tourism sector has sig- nificantly increased this year and is set to grow further as the country expects another successful tourism season.
The volume of gross transfers from abroad to Moldovan households increased by 20% y/y to $319mn in Q1, after a 13% y/y advance posted in Q1 2017, according to the central bank. Last year, the gross transfers to Moldova’s households hit $1.27bn, or 15.6% of GDP.
The EBRD said on May 9 it expects Romania’s economy to expand by 4.6% in 2018. The forecast is an upgrade from the 4.2% growth expected last November. Romania is expected to post the highest growth in the Southeast Europe region both this year and in 2019.
The average net wage in Romania rose by 15.5% y/y in nominal terms in March to RON2,704 (€582), the coun- try's statistics office announced. In real terms, the average wage rose 10.1% on the year. Real average pay in Romania has been growing at double-digit rates for two years now.
Serbia’s GDP growth will increase
to 2.9% in 2018 after having slowed
to 1.9% in 2017 from 2.8% in 2016, according to the EBRD. The slowdown in 2017 was due to a drought, which badly affected agriculture and problems in mining and electricity generation.
Eurasia
Kyrgyzstan’s public debt amounts to $4.4bn or 58% of GDP. Of that, $3.9bn is the government’s external debt.
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