Page 5 - bne_November 2020_20201104

bne November 2020 The Month That Was I 5
Economics
Eastern Europe
Ukraine’s gross international reserves dropped 8.7% month on month, or $2.5bn, to $26.5bn in September after growing 0.9% m/m in August, according to the NBU, due to the peak repayment on external debt amounting to $2.7bn.
Ukraine’s consumer inflation slowed to 2.3 % y/y in September from
2.5% y/y in the prior month, the State Statistics Service reported on October 9. Consumer prices grew 0.5% m/m
in September compared to 0.2% m/m decline in August.
Belarus' external state debt totalled $17.7bn, up by $0.6bn or 3.6% by September since the beginning of
the year, according to the Belarusian Finance Ministry said. In January- August 2020 the Belarusian government borrowed $1,921.2mn abroad.
Central Europe
The National Bank of Poland (NBP) kept its reference rate at the all- time low of 0.1% on October 7.
The NBP also reiterated its concerns about “the lack of visible and zloty exchange rate adjustment to the global pandemic-driven shock and
to the [easing of] monetary policy.”
Sales of new passenger cars in Czechia fell by 22.4% year on year to 148,319 vehicles registered in 3Q20. September sales grew by 7%, according to data published by the Association of Car Importers.
Czech nominal government debt rose by CZK446.9bn (€16.5bn) year on year to CZK2.26 trillion in 2Q20, the highest figure in the past 20 years, according to a report published by the Czech Statistics Office (CSO).
Czech state budget deficit increased to CZK252.7bn (€9.4bn) at the end of September, up from CZK230.3bn recorded in August 2020 and CZK21bn posted in September 2019, which is the highest budget deficit since 1993, according to the Ministry of Finance.
Hungary surprised by voting through a balanced budget. The cash-flow based deficit, excluding local councils, reached HUF9bn (€25mn), bringing the deficit to HUF2.27 trillion at the end of September, the Finance Ministry said.
Hungary's seasonally-adjusted Purchasing Managers Index (PMI) dropped to 48.8 points in September from 52.3 points in August, falling back under the 50-point threshold that signals a contraction in the manufacturing sector. The September gain was short lived and ended five months of decline, the fall was due
to a surge in new corona infections.
The Slovak economy is expected to drop by 8.2% year-on-year in 2020, according to the National Bank of Slovakia. For 2021, the bank’s outlook is more optimistic; it expects Slovakia's economy to grow at 5.6% in 2021, followed by 4.2% in 2022.
Lithuania posted one of the EU's highest annual retail trade growth rates for August, Eurostat reports, up 7.7% in August from a year ago. Higher growth rates were only recorded in the Netherlands (8.3%), Ireland (9.8%) and Belgium (12.9%). Meanwhile, Latvia's retail sales grew 4.4% and Estonia registered a 4.1% increase.
Southeast Europe
The European Commission said on October 6 it had adopted a €9bn comprehensive Economic and Investment Plan for the Western Balkans that should help the region move forward on its EU membership path and boost links between the countries in the region.
The World Bank thinks that Turkey's economy will contract by 3.8%
in 2020 given the impact of the coronavirus pandemic, but rebound next year to 4% growth. The Turkish government has said that in a best
case scenario growth of 0.3% could be achieved this year.
Romania's GDP contracted by only 11.9% q/q in Q2 according to the statistics office INS, which initially reported a plunge of 12.5% for the quarter.
Croatia’s economy is seen contracting by 8.1% in 2020 due to the coronacrisis and will rebound by only by 5.9% next year, the World Bank said. Prior to the coronavirus (COVID-19) pandemic, the country had a steady economic growth of around 3%.
Eurasia
Uzbekistan is one of only two countries in Europe and Central
Asia that will see positive economic growth this year as the rest of the world suffers from an economic recession caused by the coronacrisis. In the first half of 2020, GDP growth was nearly zero, compared with growth of 5.8% in the first half of 2019.
Mongolia's gross domestic product is projected to contract by 2% to 4% this year due to the coronacrisis. Mongolia looks likely to enter its first recession since 2009.
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