Page 7 - mag bne_November2017_20171102

bne November 2017 The Month That Was I 7
Economics
Eastern Europe
Investment flows among Eurasian Economic Union (EEU) member coun- tries leapt by 15.9% in 2016 after three consecutive 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 (EDB).
Industrial output in Russia grew by
a disappointing 1.8% year-on-year
in January-September 2017, RosStat statistics agency said, less than analysts were hoping for. In calendar adjusted terms the output shrank by 0.4% month- on-month in September
Foreign Direct Investment (FDI)
into Russia doubled year-on-year in the first half of 2017, Prime Minister Dmitry Medvedev told foreign investors to $14bn in January-June, but is still way off its boom year peak of c.$70bn.
Inflationary expectations of Russians for the next 12 months remained at an all-time low increasing only by 10bp to 9.6% in September, according to the monthly poll carried out by the Central Bank of Russia (CBR).
In January-September, trade between Russia and China increased by 22.4% year-on-year to $61.4bn, the Gen-
eral Administration of Customs of the People's Republic of China announced on October 13.
The International Monetary Fund (IMF) has revised its forecast for Belarus' GDP this year upwards to a 0.7% year-on-year growth vs the earlier expectation of a contraction of 0.8% y/y.
Central Europe
The Polish economy will grow 3.9% in 2018, with a government deficit of 2.7% of GDP, according to next year’s budget bill, adopted by the Polish government,
while debt will fall to 48.9% of GDP in 2021, from 53.8% expected this year.
Polish unemployment fell 1.4pp y/y to 6.9% in September, a preliminary labour ministry estimate stated. The forecastfrom the employment offices shows the tightening of the labour mar- ket continues.
Poland’s lower retirement age came into force. Polish women can retire at 60 and men at 65 in line with a law low- ering the retirement age for both sexes, a flagship policy pledge made by the now-ruling Law and Justice (PiS) party during the 2015 election campaign.
GDP growth will accelerate in all three Baltic states this year in com- parison to the subdued growth experi- enced in 2016, the IMF said. Lithuania's economy is expected to grow 3.5% this year. Latvia is seen as managing growth of 3.8%, while Estonia – the regional laggard for the past two years – is likely to post economic expansion of 4%.
FDI net inflows to Lithuania grew 25.2% y/y to €137.5mn in Q2, Bank
of Lithuania data showed. The most attractive sectors for FDI in the quarter were financial and insurance activities, wholesale and retail trade, and repair of transport vehicles and motorcycles.
Southeast Europe
The IMF upped its 2017 growth projections for Kazakhstan and Kyrgyzstan in its latest World Economic Outlook. The former is now expected
to grow by 3.3% (up from 1% in
2016) compared to the previous forecast
of 2.5%, while the latter is projected
to reach 3.5% (down from 3.8% in 2016), 0.1 of a percentage point higher than previously predicted.
The IMF lowered its 2017 growth forecast for Bosnia to 2.5%. This puts Bosnia at the bottom of the Fund's Emerging and Developing Europe group in terms of GDP growth along with Macedonia.
Bulgaria's industrial production increased 4.9% y/y in August, improv- ing from a revised 4.6% y/y rise in July. The increase was supported by improv- ing performance in the mining sector.
Eurasia
New Central Bank of Iran data showed
Iranian household expenditure growing for the first time in half
a decade, by 2% y/y in the Persian calendar year that straddled 2016-2017.
The Kazakh tenge was under
strain against the greenback, hitting its lowest levels in 11 months. The weakening recovery in oil prices and knock-on effects from Russia’s stuttering economy, partly attributed to fresh sanctions from Washington, were blamed.
Annual consumer price inflation in Kazakhstan slowed to 7.1% in Septem- ber, far below the 16.6% rate experi- enced a year ago.
The Asian Development Bank forecast a 1.3% contraction in Azerbaijani GDP in 2017 and a return to growth in 2018. Last year saw a contraction of 3.8%.
Georgia's current account deficit fell to 7.4% of GDP at end-June, down from 12.3% a year earlier. Services showed a positive balance of $507.3mn largely thanks to tourism revenues, up 27.8% y/y to $658.7mn.
www.bne.eu