Economic Snapshot for South-Eastern Europe
March 10, 2020
The outlook for the regional economy this year is much improved compared to last year as the Turkish economy will continue to gain traction. More broadly, still-cheap credit and tight labor markets should buttress wages and regional activity. Risks remain skewed to the downside, however, amid lingering external headwinds such as soft growth in the EU and the coronavirus.
South-Eastern Europe Monetary & Financial Sector News
Regional inflation rose from 7.2% in December to 7.4% in January as price pressures rose across the region bar in Romania. This year, inflation should ease compared to last year on softer inflation in Turkey, Romania and Bulgaria more than offsetting stronger price pressures in Greece, Serbia and Croatia.
In recent weeks, Turkey’s Central Bank once again cut its interest rate, bringing real interest rates deeper into negative territory. Elsewhere in the region, activity among central banks was muted due to not having a meeting or keeping the policy rate unchanged, as was the case in Serbia. This year, continued easing in Turkey should drive the regional interest rate down.
Over the past month, the Turkish lira depreciated further against the dollar; while the Romanian leu and Albanian lek lost some ground against the euro, and the Serbian dinar was stable. Other economies in the region use the euro or have pegged their currencies to the euro. This year, the regional exchange rate should depreciate against the USD, weighed on by a weaker lira.
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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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Cyprus: Inflation slips in March
April 2, 2020
Consumer prices rose 0.1% from the previous month in March, following February’s 0.4% month-on-month increase.
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Greece: Manufacturing PMI plunges to its lowest since 2015 debt crisis in March amid coronavirus outbreak
April 1, 2020
The IHS Markit manufacturing Purchasing Managers’ Index (PMI) plunged from 56.2 in February to 42.5 in March, marking the lowest reading since the debt crisis of 2015 and putting an end to a near three-year streak of expansion.
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Turkey: Manufacturing PMI falls to seven-month low in March due to Covid-19
April 1, 2020
Operating conditions in the Turkish manufacturing sector deteriorated at the close of the first quarter owing to the Covid-19 pandemic, with the Istanbul Chamber of Industry Turkey Manufacturing Purchasing Managers’ Index (PMI) falling to a seven-month low of 48.1 in March from 52.4 in February. The deterioration came on the back of moderating output and new orders, while purchasing activity was scaled back.
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Croatia: Industrial production contracts again in February
March 31, 2020
Industrial production fell 2.1% in working-day adjusted terms over the same month last year in February, a softer drop than January’s 5.5% dive.
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Serbia: Industrial production strengthens in February
March 31, 2020
Industrial production growth accelerated to 7.6% in February from 6.3% in January.
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