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bne October 2018 The Month That Was I 7
Economics
Eastern Europe
Russian statistics bureau Rosstat revised the GDP growth estimate for the second quarter from the previous 1.8% year-on-year to 1.9% y/y, and for January-June 2018 from 1.6% to 1.7% y/y, upon the publication of the produc- tion GDP breakdown data. The estimate for first-quarter economic growth remained unchanged at 1.3%.
After almost a year of sub-3% growth, Russian consumer prices were back to 3.1% y/y, up from 2.5% y/y for July. VTB Capital (VTBC) said in a note that the acceleration was foremost driven by food (+0.56pp out of the total 0.6pp).
Russia's federal budget surplus in Janu- ary-August 2018 amounted to RUB1.96 trillion ($28bn) or 3.1% of GDP, up from RUB1.38 trillion of 2.5% of GDP as of end of July. Although federal spending season- ally peaks in November-December, the Finance Ministry is close to recording the first budget surplus for the whole year since 2011 on high oil and gas revenues. The budget was initially drafted at $43.8 per barrel oil price and 1.3% of GDP deficit.
Ukraine’s government will raise minimum wages for a second time to about UAH4,200 a month ($149) in 2019, Ukrainian President Petro Poroshenko announced during his visit to the city of Vinnytsia on September 8.
Ukraine’s consumer prices remained flat in August compared to July, while annual inflation slightly accelerated to 9% year-on-year growth (from 8.9% y/y in July), state statistics service Ukrstat reported on September 10.
Belarus' foreign trade deficit widened in January-July. The foreign trade in goods soared 20.9% y/y to $39.3bn, however, the trade deficit jumped to $1.6bn in the same period of the year vs $929.7mn in January-July 2017. Belarus' foreign trade surplus in goods and ser- vices made up $403.3mn.
As of August 1, Belarus' external debt totalled $16.5bn, down by $179mn or 1.1% from the beginning of the year according to the Finance Ministry. In January-July 2018, external state bor- rowings totalled $1,506bn, including $600mn in eurobonds, $515.1mn bor- rowed from Russia and $302.5mn from Chinese banks.
Central Europe
The Czech government agreed with unions to spend 8% more on public sector wages in 2018, up from the planned 6%, Prime Minister Andrej Babis and Finance Minister Anna Schil- lerova said after meeting with union representatives. The increase will not be across the board. Many workers will get a 4% increase; policemen and soldiers will get 2% extra, plus danger pay; and teachers should get 10% more.
The investigation into money launder- ing at the Estonian branch of Danske Bank covered $150bn (€130bn) worth of transactions, a report by the Wall Street Journal claimed. Denmark’s big- gest lender Danske Bank is carrying out an internal investigation into inadequate monitoring of money it handled between 2007 and 2015, with results expected to be made public this month.
The Czech National Bank might raise the main interest rate twice before the end of 2018, governor Jiri Rusnok told Reuters. The central bank’s board will meet on September 26 and the market anticipates with higher than 70% prob- ability there will be yet another hike.
Polish PMI continued its falling streak in August. PMI fell 1.5 points to 51.4
in August, a 22-month low, IHS Markit reported, indicating that the reduction of the current strength of Poland’s indus- trial sector could be imminent.
Czechia’s economic growth decelerated to 2.4% y/y in the second quarter of 2018 from 4.2% growth in the first quarter as the economy runs up against its structural limits, the Czech Statistics Office (CSU) said. The main reason is a strong base effect from the previous year, but the slowdown was also due to depleted capacities of the Czech economy, analysts say.
Southeast Europe
Remittances sent home by Albanians working abroad jumped 11.6% y/y to €182mn in the second quarter of 2018, after rising by 8.9% y/y in the previous quarter, the central bank said.
Montenegro’s public debt jumped
to 70.08% of GDP in January-June, standing at €3.1bn at the end of June. The country's public debt has increased sharply since 2008 when it stood at just 29% of GDP.
Serbia’s exports amounted to €9.4bn in January-July, rising 8.5% y/y, according to the latest figures from the country's statistics office. In US dollar terms, the value of exports was $11.3bn, up 19.7% y/y.
Eurasia
The Armenian government will increase the guaranteed mini- mum pension by around 60%
to AMD25,500 (€44), an advisor
to Prime Minister Nikol Pashin-
ian revealed. There will be no more extreme poverty among pensioners, said Mesrop Arakelyan, a lecturer at Yerevan State University.
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