Economic Snapshot for South-Eastern Europe
February 19, 2020
This year, prospects for the regional economy are much improved compared to 2019, mainly owing to a rebounding Turkish economy. Elsewhere, still-cheap credit and a tighter labor market should feed through to wages and further support regional activity. However, external headwinds darken the horizon due to lingering trade tensions and soft momentum in the EU.
South-Eastern Europe Monetary & Financial Sector News
Inflation in the region rose to 7.2% in December from 6.3% in November on higher price pressures in Turkey, which ended several months of declining inflation in the country. Inflation also picked up elsewhere, with the sole exceptions being Albania and Kosovo. This year, inflation should moderate compared to last year amid softer inflation in Turkey, Romania and Bulgaria.
The Turkish Central Bank continued to make noise with a more-aggressive-than-expected fifth consecutive rate cut in January. Meanwhile, North Macedonia’s Central Bank also cut its interest rate, by 25 basis points to 2.00%. Elsewhere, central-bank activity was muted in recent weeks. This year, the regional interest rate should fall as Turkey further loosens its stance.
In recent weeks, the Turkish lira lost ground against the dollar, while the Albanian lek, Romanian leu and Serbian dinar were broadly steady against the EUR. The region’s other economies use the euro or have currencies pegged to the euro. This year, the regional exchange rate is seen depreciating, weighed on by a weak lira offsetting a relatively stable euro..
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South-Eastern Europe Economic News
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Turkey: Central Bank cuts policy rate in February for sixth consecutive time
February 19, 2020
At its 19 February Monetary Policy Committee (MPC) meeting, Turkey’s Central Bank extended its easing cycle by cutting the one-week repo rate for the sixth time in a row.
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Bulgaria: Inflation at seven-year high in January
February 14, 2020
Consumer prices increased 0.9% from the previous month in January, following December’s 0.7% rise.
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Bulgaria: Growth moderates in Q4 but surpasses expectations
February 14, 2020
The economy grew 3.5% year-on-year in the fourth quarter, slightly down from the third quarter’s 3.7% outturn but beating market expectations, according to a preliminary release by the Statistical Institute on 14 February.
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Turkey: Current account deficit widens in December
February 14, 2020
Turkey’s current account deficit widened markedly from USD 1.1 billion in December 2018 to USD 2.8 billion in December 2019 (November: USD -0.4 billion, previously reported: USD -0.5 billion).
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Romania: Growth picks up in Q4 2019, beats market expectations
February 14, 2020
The economy grew 4.3% year-on-year in the final quarter of 2019, well above the third quarter’s 3.0% expansion, according to a flash estimate released by the Statistical Institute on 14 February.
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