Page 7 - BNE_magazine_06_2020 Growers

bne June 2020 The Month That Was I 7
Economics
Eastern Europe
Russian GDP was up by 1.6% year on year in 1Q20, according to preliminary data from Rosstat, decelerating slightly from 2.1% seen in 4Q19. In April GDP dropped by 20% in real terms according to the data from the Finance Ministry, although the government managed
to maintain surpluses in the federal budget, trade balance and current account.
The Russian Ministry of Economic Development has updated the 2020 economic forecast, guiding for 5% GDP contraction, rebounding to 2.8% GDP growth in 2021. The consensus forecast has moved to a 3-5% recession. The government could borrow 1.5-2% of GDP (RUB4-4.5 trillion, or $53bn-60bn) in 2020 to finance the 4% budget deficit.
Russian industrial output declined by 6.6% year on year in April 2020 amid the coronavirus (COVID-19) epidemic and the lockdown, less than a decline of over 7% predicted by the analysts of BCS Global Markets and much below the consensus expectations of over
13% decline.
Ukraine’s real GDP fell by 1.5% year on year, or 0.8% quarter on quarter seasonally adjusted in January- March, after growing 1.5% y/y (0.0% q/q) in the fourth quarter of 2019, according to preliminary estimates. The National Bank of Ukraine (NBU) believes that the nation's GDP will decline by
"no more" than 5% year on year in 2020.
Ukraine's state-run oil and gas company Naftogaz paid UAH28bn in taxes and fees to the state budget in January-April. Revenues from the group amounted to more than 12%
of total state budget revenues for the specified period, Naftogaz said.
The Belarusian economy declined by 1.3% year on year in January-April and will contract by 5% y/y in 2020
as a result of global coronavirus the
government said. Next year the country's economy will experience a 3.5% y/y recovery, according to the EBRD.
Central Europe
Polish GDP grew by a seasonally adjusted 1.6% y/y in the fourth quarter, easing 1.9pp against the adjusted expansion rate recorded in the fourth quarter, according
to the Central Statistical Office.
Poland’s industrial production crashed 24.6% y/y in unadjusted terms in April, statistical office GUS reported on May 21. The huge fall follows a decline of 2.3% y/y in March.
Poland’s current account ballooned to a surplus of PLN10.81bn (€2.44bn) in March, the National Bank of Poland said. The sharp improvement on the primary income account – returning to surplus after posting huge deficits both in February and in March 2019 - drove up the headline figure.
The number of registered jobseekers in Hungary rose by 69,000, or 26.5%, to 330,700 in April from a year earlier, according to the National Employment Office. Of the total, only 62% were eligible for unemployment benefits. The figure translates into a 7% jobless rate, which is near twice the official figure of the Central Statistics Office.
Southeast Europe
Slovenia’s general government is expected to run a deficit of €3.7bn in
2020 or 8.1% of GDP according to the central bank. The government debt in nominal terms will increase €37.556bn at the end of the year or 82.4% of GDP. The previous projections of the central bank were for the budget deficit of 5% of GDP in 2020 and public debt of 76.4% of GDP. The EBRD expects that Slovenia’s economy will shrink by 5.5% in 2020.
Romania’s GDP increased by 2.4% y/y, in Q1, according to statistics office INS. The performance was the strongest among EU member states according to Eurostat.
Foreign direct investment (FDI)
to Romania turned negative in the first quarter of the year, particularly in February-March, as multinationals halted their equity investments and asked their local subsidiaries to pay back their loans, according to the central bank.
Net foreign direct investment (FDI) in Bulgaria was €254.4mn in the first three months of 2020, versus €148.6mn in January-March 2019, preliminary central bank data showed on May 18. The net investment figure is equal to 0.4% of projected 2020 GDP.
Eurasia
Goldman Sachs has warned that the Turkish lira (TRY) could fall as far as TRY8.25 to the USD by this time next year. The currency hit an all-time low of 7.27 to the dollar on May 7. There are concerns over Turkey’s “policy credibility” and falling foreign currency reserves, Goldman Sachs said.
Turkey looks set for a 3.5% contraction in its GDP this year, according to the EBRD. In its forecast put out last November, the development bank anticipated GDP growth of 2.5%.
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