piraeus bank group

Economic Indicators Bulletin in Southeastern Europe - November 2014

  • On November 26th, the Bank of Albania (BoA) decided to cut the key policy rate by 25bp. to the historic low of 2.25% as a result of current economic and monetary developments. The BoA estimates that the reduced level of the key policy rate will improve conditions for financing domestic economic activity and will return inflation to within the BoA medium target.

  • In Bulgaria, private sector credit increased at a faster rate of 1.9% YoY in October from 0.7% in October 2013, as business loans increased by 3.0% from 1.4% for the same months. Household lending increased marginally

  • In November, the international rating agency Moody’s revised upwards Cyprus’ bond ratings to B3 from Caa3 with stable outlook. The primary factors for the upgrade are fiscal consolidation (as for 2014 a primary fiscal surplus is expected) and the stabilisation of public debt as a percentage of GDP in 2015. A secondary factor for the upgrade is the stabilisation of the Cypriot financial system through the recapitalisation of the troubled banks, lowering any passing-through of their liabilities to the government balance sheet. .

  • In Romania, the fiscal balance turned to a surplus of 0.3% of GDP in January-October compared to a deficit of 1.2% in January-October 2013, as public spending contracted to 26.6% of GDP from 27.8% for the same periods.

  • In Serbia, the International Monetary Fund (IMF) and the government reached an agreement for a precautionary Stand-By Arrangement of a proposed EUR 1bn. The purpose of the SBA is to establish the right conditions for sustainable growth, the creation of new jobs in the medium-term, fiscal consolidation and structural reforms.

Ilias Lekkos

Chief Economist
Dimitria Rotsika