Economic Snapshot for South-Eastern Europe
April 8, 2020
The economic outlook for the region has darkened dramatically due to the Covid-19 pandemic, which will hammer tourism, trade and private consumption. Contractions in Turkey, Romania, Greece, Bulgaria, Croatia and Serbia are expected to plunge the regional economy into recession this year. Fiscal space to respond to developments varies greatly across the region.
South-Eastern Europe Monetary & Financial Sector News
Regional inflation edged down to 7.2% in February from 7.3% in January on softer price pressures in all countries except Cyprus, North Macedonia and Turkey. This year, inflation is expected to ease notably as the health crisis weighs heavily on economic activity in the region, while low global oil prices provide further downward pressure.
Interest rates were cut in recent weeks in Turkey, Romania, Serbia, Albania and North Macedonia to combat the economic fallout of the Covid-19 pandemic. The ECB, meanwhile, opened the liquidity floodgates but kept interest rates unchanged. The regional interest rate should be lower this year compared to last as central banks look to buttress activity.
The Turkish lira lost notable ground against the USD in recent weeks amid a flight to safe assets due to the Covid-19 pandemic. Against the EUR, the Serbian dinar was relatively stable while the Romanian leu and Albanian lek depreciated. The EUR itself depreciated somewhat against the USD. This year, the regional exchange rate is seen weighed on by lira weakness.
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5 years of South-Eastern Europe economic forecasts for more than 30 economic indicators.
South-Eastern Europe Economic News
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Turkey: Business confidence improves in May amid easing of lockdown measures
May 22, 2020
Sentiment among Turkish businesses rose to 76.9 in May from April’s over one-decade low of 66.8.
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Turkey: Central Bank slashes its policy rate again in May
May 21, 2020
The Central Bank once again cut the one-week repo rate at its 21 May meeting, this time by 50 basis points to bring the rate down to 8.25%—the lowest it has been in two years, since before the country’s 2018 currency crisis.
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Turkey: Consumer confidence ticks up in May
May 20, 2020
Consumer confidence ticked up in May despite the coronavirus, with the consumer confidence index rising to 59.5 from 54.9 in April.
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Bulgaria: Inflation at over 2-year low in April amid lockdown and falling fuel prices
May 18, 2020
Consumer prices fell 0.6% from the previous month in April, matching March’s drop.
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Bulgaria: Economy defies coronavirus crisis and continues growing in Q1
May 15, 2020
The economy grew 2.4% year-on-year in the first quarter, down from Q4 2019’s 3.1% outturn but beating market expectations that the economy would contract in Q1, according to a preliminary release by the Statistical Institute on 15 May.
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