piraeus bank group

Economic Indicators Bulletin in Southeastern Europe - June 2014

  • On June 25th, the Bank of Albania (BoA) decided to keep the key policy rate unchanged at 2.5%, as it is estimated that the impact of past policy rate cuts will be gradually transmitted to the financial markets and provide the appropriate monetary conditions for the return of inflation to the BoA target.

  • In Bulgaria, private sector credit increased in May at a marginally faster rate of 1.8% YoY from 1.6% in May 2013, while business loans increased by 2.6% from 3.2% for the same months. Household lending increased by 0.3% in May compared to a decrease of 1.3% in May 2013, whereas private sector deposits increased at a faster rate of 8.3% YoY from 4.8% for the same months. Finally, in May, the liquidity ratio (loans/deposits) moderated to 75.9% from 80.8% in May last year.

  • According to the Cyprus Central Bank, real GDP in 2014 is expected to contract less than the Troika’s estimate of 4.2%. The main reason for this is the better than expected real GDP performance in 2014Q1.

  • In Romania, private sector credit in May contracted by 2.1% YoY in May from -2.4% in the same month last year. Local currency loans increased at a faster rate, but foreign currency loans contracted further. Business loans contracted in May by 3.0% from an increase of 0.1% in May last year, while household loans decreased by 1.2% from -2.6% for the same months. Private sector deposits increased in May at a faster rate of 6.6% YoY from 4.4% in May 2013, while the liquidity ratio (loans/ deposits) was 100.8% from 109.6% for the same months.

  • In Serbia, real GDP increased marginally, by 0.1% YoY in 2014Q1 from 3.0% in 2013Q4 and 2.8% in 2013Q1. The main growth driver was exports. However, final consumption and investments contracted in 2014Q1.

Ilias Lekkos

Chief Economist