South Eastern Europe & Mediterranean Emerging Market ... - NBG

Economic Analysis Division Emerging Markets Research

Quarterly Chartbook Q1:2018 Turkey Romania Bulgaria Serbia FYROM Albania Cyprus Egypt

NBG - Economic Analysis Division https://www.nbg.gr/en/the-group/press-office/e-spot/reports

Paul Mylonas, PhD : [email protected] Emerging Markets Research Head: Michael Loufir : [email protected] Analysts: Konstantinos Romanos-Louizos  : [email protected]

Balance of Payments

Louiza Troupi  : [email protected] Athanasios Lampousis  : [email protected] The information in this document, being distributed by National Bank of Greece S.A., is based upon data and sources of information believed to be correct and reliable but the accuracy of which cannot be guaranteed. Accordingly, no representation or warranty, implied or expressed, is made by any member of National Bank of Greece S.A. as to its accuracy adequacy, timeliness or completeness.

NBG-Emerging Markets Research

Quarterly Chartbook General information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Date of next elections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Official financial support . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Foreign currency debt rating . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Global competitiveness index . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Ease of doing business index . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Real sector. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Industrial production . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Real GDP growth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Output gap . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Unemployment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Wages (nominal and real) . . . . . . . . . . . . . . . . . . . . . . 13 Wages (nominal, EUR) and Tax rates. . . . . . . . . . . . . 14 Balance of payments . . . . . . . . . . . . . . . . . . . . . . . . . . 15 External trade . . . . . . . . . . . . . . . . . . . . . . . . . 15 Real effective exchange rate . . . . . . . . . . . . . 16 Current account balance . . . . . . . . . . . . . . . . . 17 Net FDI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Other net capital flows. . . . . . . . . . . . . . . . . . . 19 FX reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Short-term external debt / FX reserves . . . . . . 21 Balance of payments. . . . . . . . . . . . . . . . . . . . 22 External financing . . . . . . . . . . . . . . . . . . . . . . 23 External debt . . . . . . . . . . . . . . . . . . . . . . . . . 24 Real estate prices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 Inflation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 Nominal effective exchange rate. . . . . . . . . . . . . . . . . . . . . . . 27

Q1:2018

Policy rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 Reserve requirement ratios . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Fiscal balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 Public debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 Financial Markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 Exchange rates. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 Money market rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 Government debt rates . . . . . . . . . . . . . . . . . . . . . . . . . . 35 Sovereign spreads . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 Stock market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 Banking sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 Total loans (m-o-m % change) . . . . . . . . . . . . . . . . . . . . . 38 Total loans (y-o-y % change) . . . . . . . . . . . . . . . . . . . . . . 39 Retail loans (y-o-y % change) . . . . . . . . . . . . . . . . . . . . . . 40 Corporate loans (y-o-y % change) . . . . . . . . . . . . . . . . . . 41 Total deposits (m-o-m % change) . . . . . . . . . . . . . . . . . . . 42 Total deposits (y-o-y % change) . . . . . . . . . . . . . . . . . . . . 43 Retail deposits (y-o-y % change) . . . . . . . . . . . . . . . . . . . . 44 Corporate deposits (y-o-y % change) . . . . . . . . . . . . . . . . 45 Loans/GDP (%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46 FX loans/total loans (%) . . . . . . . . . . . . . . . . . . . . . . . . . . 47 Deposits/GDP (%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48 FX deposits/total deposits (%) . . . . . . . . . . . . . . . . . . . . . . 49 Loans/deposits (%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 ROAE (%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51 CAD (%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52 NPL ratio (%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 Foreign ownership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54

NBG - Economic Analysis Division

General information Republic of Turkey

Romania

Republic of Bulgaria

Population (2017 estimate, mn): 80.6

Population (2017, estimate, mn): 20.0


GDP (2017 estimate, EUR, bn): 752.8



GDP per Capita (2017 estimate, EUR): 9,337



Government type: Parliamentary Republic

Government type: Semi Presidential Republic


Chief of state: Recep Tayyip ERDOGAN

Chief of state: Klaus Werner IOHANNIS

Chief of state: Rumen RADEV

Head of Government: Binali YILDIRIM

Head of Government: Vasilica-Viorica DANCILA

Head of Government: Boyko BORISOV

Minister of Finance: Naci AGBAL

Minister of Finance: Eugen-Orlando TEODOROVICI

Minister of Finance: Vladislav GORANOV

Central Bank Governor: Murat CETINKAYA

Central Bank Governor: Mugur ISARESCU

Central Bank Governor: Dimitar RADEV

Republic of Serbia

Former Yugoslav Republic of Macedonia

Republic of Albania













Chief of state: Aleksandar VUCIC

Chief of state: Gjorge IVANOV

Chief of state: Ilir META

Head of Government: Ana BRNABIC

Head of Government: Zoran ZAEV

Head of Government: Edi RAMA

Minister of Finance: Dusan VUJOVIC

Minister of Finance: Dragan TEVDOVSKI

Minister of Finance: Helga VUKAJ

Central Bank Governor: Jorgovanka TABAKOVIC

Central Bank Governor: Dimitar BOGOV

Central Bank Governor: Gent SEJKO

Republic of Cyprus

Arab Republic of Egypt







Government type: Presidential Republic without PM

Government type: Semi Presidential Republic

Chief of state: Nicos ANASTASIADES

Chief of state: Abdel Fattah Said AL-SISI

Head of Government: Nicos ANASTASIADES

Head of Government: Sherif Ismail MOHAMED

Minister of Finance: Harris GEORGIADES

Minister of Finance: Amr EL-GARHY

Central Bank Governor: Chrystalla GEORGHADJI

Central Bank Governor: Tarek AMER

NBG – Economic Analysis Division – Emerging Markets Research

Quarterly Chartbook / Q1:2018

1

Date of next elections A light election agenda in the countries under review this year In Cyprus, President N. Anastasiades secured a second term in office on February 4th, receiving a strong mandate to resume reforms In Egypt, outgoing President el-Sissi is widely expected to be re-elected in the upcoming presidential elections (to be held in late March), reassuring investors that the 3year IMF-supported programme (signed in November 2016) will remain on track

Date of Next Elections Turkey

Romania

Bulgaria

Serbia

FYROM

Albania

Cyprus

Egypt

Legislative

November 2019

December 2020

March 2021

April 2020

May 2020

June 2021

May 2021

Oct.- Dec. 2020

Presidential

November 2019

November 2019

November 2020

April 2022

April 2019

July 2022

February 2023

March 2018

Local

November 2019

June 2020

October 2019

April 2020 *

March 2021

June 2019

December 2021

Unknown **

*: Local elections in Belgrade are due on March 4 th **: Last local elections were held in April 2008



2

Official financial support Serbia’s 3-year EUR 1.2bn precautionary SBA expires in February 2018, largely overperforming its original targets The Executive Board of the IMF completed the second review of Egypt’s 3-year economic reform programme in late December, allowing the authorities to draw the equivalent of USD 2bn (bringing total disbursements to USD 6bn)

IMF & EU Financial Support (EUR bn) Albania

Cyprus

Egypt

20112013*

20132015*

---

20092011

20112013*

20152018*

20112013

20142017

20132016

20162019

IMF

---

13.0

3.6

2.0

---

2.9

1.1

1.2

0.5

0.4

1.0

12.0**

EU

---

5.0

1.4

2.0

---

---

---

---

---

---

9.0

---

IMF

---

12.1

---

---

---

1.5

---

---

0.2

0.4

0.9

6.0**

EU

---

5.0

---

---

---

---

---

---

---

---

6.3

---

IMF

---

12.1 since 2009

---

1.6 since 2009

0.2

---

0.3 early in 2017

---

EU

---

1.5 since 2009

---

---

---

---

---

---

IMF

---

---

---

---

---

Starting in 2019

Starting in 2020

Starting in 2021

EU

---

EUR 1.35 and 1.0bn, respectively, in 2018, and 2019

---

---

---

---

Starting in 2027

---

Serbia

FYROM

Bulgaria

Romania

2009 2011

Turkey ---

Period

Programme

Drawn so far

Repaid

Next Repayments

* Precautionary ** bn USD



3

Foreign currency credit rating Since last December, only Serbia’s credit rating has been upgraded (by one notch to BB by both S&P and Fitch -- 2 notches below investment grade)

Non-Investment Grades

Fitch

Albania Foreign Currency LT Debt Rating June 2008 / February 2017S&P/Fitch

Moody's

Investment Grades


S&P

70 Baa1

Baa2

65

BBB

65,00

Baa2 65

BBB

Baa3

BBB-

60,00

Baa3

BBB-

BB+

55,00

Ba1

BB

Ba2

60

Ba1

55

Ba2

50

50,00


BB-

Ba3

45

45,00 B+

B1

40

S&P

40,00

S&P

Fitch

A ABBB+ Bulgaria

Bulgaria

BBB- Bulgaria, Romania Romania

Romania

BB+

Cyprus

Turkey

BB

Serbia, Turkey

BB-

FYROM

Serbia, Cyprus

B+

Albania

Albania

Egypt

Egypt

Turkey

FYROM, Cyprus, Serbia

B B-

65,00

60

60,00

BB+

55 50

55,00 BB

Moody's


50,00


BB-

Ba3

45

45,00 B+

B1

40

80 A2 75 Baa1 70 Baa2 65 Baa3 60 Ba1 55 Ba2 50 Ba3 45 B1 40 B2 35 B3 30 Caa1 25 Caa2 20

Egypt

S&P

FYROM Foreign Currency LT Debt Rating June 2008 / April 2017 S&P/Fitch

100 Moody's S&P/Fitch 95 90 Aa3 85 A1 Investment Grades 80 A2 75 Baa1 70 Baa2 65 Baa3 60 Ba1 55 Ba2 50 Ba3 45 B1 40 Non-Investment Grades B2 35 B3 30 Caa1 25 Caa2 Caa3 20

Moodys

S&P

100,00 95,00 90,00 AAA+ 85,00 A 80,00 A75,00 BBB+ 70,00 BBB 65,00 BBB60,00 BB+ 55,00 BB 50,00 BB45,00 B+ 40,00 B 35,00 B30,00 CCC+ 25,00 CCC 20,00 CCC-

Fitch


A2 80 A3 75 Baa1 70 Baa2 65 Baa3 60 Ba1

BBB60,00 BB+ 55,00 BB 50,00 BB-

45,00

B+ 40,00 B 35,00 B-


CCC

Fitch

Egypt Foreign Currency LT Debt Rating June 2008 / April 2017 S&P/Fitch

Moody's

Investment Grades

80,00 A 75,00 A70,00 BBB+ 65,00 BBB 60,00 BBB55,00 BB+

50 Ba3

45 40 B2 35 B3 30 Caa1 25 Caa2 20 Caa3

30,00 25,00 20,00

CCC+

55 Ba2 B1

A80,00

75,00 A70,00 BBB+ BBB 65,00

Investment Grades

S&P

Cyprus Foreign Currency LT Debt Rating June 2008 / February 2017

40,00

Fitch

Moody's

CCC+

80,00 A 75,00 A70,00 BBB+ BBB 65,00 BBB60,00 BB+ 55,00 BB 50,00 BB45,00 B+ 40,00 B 35,00 B30,00 CCC+ 25,00 CCC 20,00

BBB+ 70,00

Investment Grades

Moody's

A+

BBB

75,00 A-

A3

Fitch

Moody's

80,00

A

A2

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

Investment Grades

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

S&P

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

80 A2 75 A3 70 Baa1 Baa2 65 Baa3 60 Ba1 55 Ba2 50 Ba3 45 B1 40 B2 35 B3 30 Caa1 25 Caa2 20

BBB+ 70,00

Baa1 70

Investment Grades

Investment Grades

Moody's

75

A

75 A3

Long-Term Foreign Debt Currency Ratings, Feb. 2018

80,00 A 75,00 ABBB+ 70,00 BBB 65,00 BBB60,00 BB+ 55,00 BB 50,00 BB45,00 B+ 40,00 B 35,00 B30,00 CCC+ 25,00 CCC 20,00

S&P/Fitch

75,00 A-

A2

Moody's

Serbia Foreign Currency LT Debt Rating June 2008 / February 2017S&P/Fitch

Moody's June 2008 / February 2017

80

Fitch

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

80 A2 75 A3 Baa1 70 Baa2 65 Baa3 60 Ba1 55 Ba2 50 Ba3 45 B1 40 B2 35 B3 30 Caa1 25 Caa2 20

Moody's

S&P

Foreign Currency LT Debt Rating Bulgaria

S&P/Fitch

80,00


Moodys

Foreign Currency LT Debt Rating Romania June 2008 / February 2017

Moody's

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18


80

50,00 BB

45,00 BB40,00 B+ B35,00 B-30,00


CCC+ 25,00 CCC 20,00

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

Investment Grades

A80 A-75 70 BBB+ BBB 65 BBB60 BB+ 55 BB 50 BB45 B+ 40 B35 B-30 CCC+ 25 CCC 20

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

Turkey Foreign Currency LT Debt Rating June 2008 / April 2017 S&P/Fitch

Moody's

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

80 A2 75 A3 70 Baa1 65 Baa2 Baa3 60 Ba1 55 Ba2 50 Ba3 45 B1 40 B2 35 B3 30 Caa1 25 Caa2 20

Moodys

S&P

Fitch

4

Global competitiveness index 2017-2018* (World Economic Forum) According to the latest WEF’s GCI, Bulgaria is the most competitive among the countries under review Global Competitiveness Turkey Index 2016-2017

Global Competitiveness Romania Index 2016-2017

Institutions

Business sophistication

Health and primary education

Market size

Romania Europe & North America

Technological readiness

Health and primary education Higher education and training

Financial market development Serbia Europe & North America

Macroeconomic environment

Goods market efficiency Labour market efficiency

78th out of 137



Financial market development


Bulgaria Europe & North America

49th out of 137

100

80

80

60

60

40

40

20

20

0

Not Ranked due to Lack of Data

0

Less favourable standing

FYROM

Market size

Infrastructure

Infrastructure

FYROM

Global Competitiveness Rankings* (2017-2018)

100

Egypt


68nd out of 137

Labour market efficiency

Market size

7 6 5 4 3 2 1 0


Goods market efficiency

Bulgaria

out of 137

Institutions

7 6 5 4 3 2 1 0

Higher education and training

53th

Global Competitiveness Serbia Index 2016-2017

Innovation

Health and primary education

Turkey






Innovation

Infrastructure


Higher education and training

Financial market development Turkey Europe & North America


7 6 5 4 3 2 1 0

Cyprus


Innovation

Romania

Market size

Institutions

Institutions

Infrastructure

Albania


7 6 5 4 3 2 1 0

Serbia

Innovation

Global Competitiveness Bulgaria Index 2016-2017

More favourable standing

* Rankings are based on average scores out of 137 countries

Global Competitiveness Albania Index 2016-2017

Global Competitiveness Cyprus Index 2016-2017 Institutions

Institutions Innovation


Market size

7 6 5 4 3 2 1 0


Albania Europe & North America

Innovation

Infrastructure

Macroeconomic environment Health and primary education Higher education and training




Global Competitiveness Egypt Index 2016-2017

75th out of 137



Market size

7 6 5 4 3 2 1 0


Innovation

Macroeconomic environment Health and primary education Higher education and training

Financial market development Cyprus Europe & North America

Institutions Infrastructure


64rd out of 137



Market size

7 6 5 4 3 2 1 0




Financial market development Egypt Europe & North America

Infrastructure


100th out of 137

5

Ease of doing business index 2018* (World Bank) The latest WB’s EDBI shows that FYROM has the most favourable standing among the countries under review Turkey

Romania

Starting a Business

Resolving Insolvency

100

80 60

Enforcing Contracts

40 20


Enforcing Contracts

Getting Electricity

100 80 60 40 20 0

Dealing with Construction Permits

Registering Property

Paying Taxes Getting Credit

Serbia

Enforcing Contracts

100 80 60 40 20 0

Trading Across Borders

Dealing with Construction Permits Getting Electricity


140

120

120

100

100

80

80

60

60

40

40

20

20

Less favourable standing

FYROM

Serbia

Romania

Bulgaria

Cyprus

Turkey

43rd out of 190

50th out of 190

Starting a Business

Resolving Insolvency Enforcing Contracts

100 80 60 40 20 0


Dealing with Construction Permits Getting Electricity


0

Albania

Getting Credit

Protecting Minority Investors

Getting Credit

FYROM

140

Egypt

Paying Taxes

Getting Electricity


out of 190

0



Paying Taxes

45th

Ease of Doing Business Rankings* (2018)

Starting a Business Resolving Insolvency

Enforcing Contracts

100 80 60 40 20 0


Getting Credit Protecting Minority Investors

60th out of 190



Getting Electricity



Paying Taxes

Starting a Business

Starting a Business Dealing with Construction Permits

0 Trading Across Borders

Bulgaria

Paying Taxes


11th out of 190

More favourable standing

* Rankings are based on average scores out of 190 countries

Albania

Cyprus Starting a Business

Starting a Business

Resolving Insolvency Enforcing Contracts

100 80 60 40 20 0




Getting Electricity


Paying Taxes

Getting Credit


Egypt

Enforcing Contracts

100 80 60 40 20 0


out of 190



Getting Electricity


Paying Taxes 65th

Starting a Business



53rd out of 190



Getting Electricity


Paying Taxes

Getting Credit


Enforcing Contracts

100 80 60 40 20 0


128th out of 190

6

-10 -10

-15 -15

Albania 10

N.A.

NBG – Economic Analysis Division – Emerging Markets Research 20

15 15

10 10

Industrial Output (% of GDP, Q3:17)

Cyprus Industrial Production (y-o-y % change)

5

0

-5

-10

-15

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

10

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

Romania

20

-5

Serbia

10

-5

Bulgaria

10

0

Egypt

25

0

Turkey

15

5

Albania

15

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

-10

5

FYROM

Serbia

15 12 9 6 3 0 -3 -6 -9 -12 -15

Turkey Industrial Production (y-o-y % change)

Cyprus

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

15 12 9 6 3 0 -3 -6 -9 -12 -15

Romania 10

8 8

6 6

4 4

2 2

0 0

-2 -2

-4 -4

-6 -6

-8 -8

-10

25

5 5

0 0

10

5

0

-5

-10

-15


10 8 6 4 2 0 -2 -4 -6 -8 -10 -12

25

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

Industrial production (12-month rolling, y-o-y % change) The contribution of industrial output to gross value added growth improved markedly in Romania, Egypt and Cyprus in 2017

10

Bulgaria 10

5 5

0 0

-5 -5

-10 -10

-15 -15

-20 -20

FYROM Industrial Production (y-o-y % change)

Egypt Industrial Production (y-o-y % change)

10 8 6 4 2 0 -2 -4 -6 -8 -10 -12

20

25

20

15 15

10 5

10

5

0 0

-5

-10

-5

-10

-15 -15

7

Real GDP growth, potential Real GDP growth, output gap and per capita (nominal) GDP All economies under review are set to post solid growth this year (higher than 3%) This year’s growth is expected to surpass its long-term potential in all economies under review Large positive output gaps in Romania, Cyprus, Bulgaria and Turkey point to an overheating of the economy and increasing inflationary pressures

1

0

0

3

2

2

1

1

0

0

Turkey

Cyprus

Romania

2017E

3

2018F

2017E

Output Gap (% of Potential Output)

2018F

Egypt

1

4

Cyprus

2

4

Albania

2

5

FYROM

3

6

5

Serbia

4

3

Potential Real GDP Growth (%)

6

Egypt

4

Albania

5

FYROM

5

Serbia

6

Bulgaria

6

Turkey

7

Bulgaria

8

7

Romania

Real GDP Growth (%)

8

Long-Term

Per Capita (Nominal) GDP (2016)

0,0

9

30

-0,3

-0,3

6

20

-0,6

-0,6

3

10

-0,9

-0,9

0

0

Turkey

2017E


2018F

'000 EUR


80

Egypt

40

0,0

Cyprus

12

Albania

0,3

FYROM

50

0,3

Serbia

15

Bulgaria

0,6

Romania

60

0,6

Turkey

18

Egypt

0,9

Cyprus

70

0,9

Albania

21

FYROM

1,2

Serbia

1,2

Bulgaria

24

Romania

1,5

1,5

% EU-28 average

8

5 4

2 2

0 0

-2 -2

Serbia 10

8 8

6 6

4 Forecast

2

0 0

-2 -2

1

-4 -4

10

Forecast

8 8 10

7 7 8

6 6 6

5 5 4 4

4

4 4 2 2

2

3 3 0 0

2 2 -2 -2

1 -4 -4

0 -6 -6

-8 -8

10

9 9

8 8

7 7

6 6

5

4 4

3 3

2 2

1 1

0 0


Albania Q4:01 Q4:02 Q4:03 Q4:04 Q4:05 Q4:06 Q4:07 Q4:08 Q4:09 Q4:10 Q4:11 Q4:12 Q4:13 Q4:14 Q4:15 Q4:16 Q4:17 Q4:18 Q4:19

6

4 Forecast

6

0

-2

-4

-6

Q4:01 Q4:02 Q4:03 Q4:04 Q4:05 Q4:06 Q4:07 Q4:08 Q4:09 Q4:10 Q4:11 Q4:12 Q4:13 Q4:14 Q4:15 Q4:16 Q4:17 Q4:18 Q4:19

6

FYROM

Forecast 8

Serbia

8

Bulgaria

10

Cyprus

10

Albania

10

Egypt

12

Romania

Turkey Romania 10

-4 -4 -4

-6 -6 -6 -6

-8 -8 -8 -8

6 6

4 4

2 2

0 0

-2 -2

-4

Real GDP Growth (2017E, %)

Cyprus 6

Forecast

7

4 4

2 2

0

-2

-4

-6

Quarterly Chartbook / Q1:2018 Q4:01 Q4:02 Q4:03 Q4:04 Q4:05 Q4:06 Q4:07 Q4:08 Q4:09 Q4:10 Q4:11 Q4:12 Q4:13 Q4:14 Q4:15 Q4:16 Q4:17 Q4:18 Q4:19

10



8

Turkey


12



Real GDP (4-quarter rolling, y-o-y % change) GDP growth is expected to range between 3.5% and 4.8% this year in the economies under review

8

Bulgaria

8

8

6 Forecast

6

4 4

2 2

0 0

-2 -2

-4 -4

FYROM 10

8

Forecast

8 Forecast

6

Egypt 8

6

7

6

5 5

4 4

3 3

2 2

1 1

0 0

-1 -1

-2 -2

9

Output gap (4-quarter rolling) The output gap should remain negative in Egypt and FYROM this year Turkey

Romania 210 200 190 180 170 160 150 140 130 120 110 100 90 80

10

10

130

8

125

6

120

4

115

2

110

0

105

1,4 1,2 1,0 0,8 0,6 0,4 0,2 0,0 -0,2 -0,4 -0,6 -0,8 -1,0

0

110

0

-2

170

10

160

8

150

6

Romania

Q4:19

Q4:18

Q4:17

Q4:16

Q4:15

Q4:14

Q4:13

110

-4 100 -6

Q4:19

Q4:18

Q4:17

Q4:16

Q4:15

Q4:14

Q4:13

Q4:12

Q4:11

Q4:10

Q4:09

Q4:08

Q4:07

Q4:06

Q4:05

90

Q4:03 105

10

170 160

Potential Output (rhs, Q2:07=100) Actual/Projected Output (rhs, Q2:07=100) Output Gap (%, lhs)

6

150

130 120

-2

-2

110

-4

-4

100

-6

90

-8

80

100


Q4:19

Q4:18

Q4:17

Q4:16

Q4:15

Q4:14

Q4:13

Q4:12

Q4:11

Q4:10

Q4:09

Q4:19

Q4:18

Q4:17

Q4:16

Q4:15

Q4:14

Q4:13

Q4:12

Q4:11

Q4:10

Q4:09

Q4:08

Q4:07

Q4:06

85

Q4:08

90


Q4:07

95

Q4:05

Q4:19

Q4:18

Q4:17

Q4:16

Q4:15

Q4:12

-2

0

-8

Q4:14

Q4:11

120 0

Q4:04

Turkey

130

2

140

-6

Q4:13

Q4:10

Q4:09

Q4:08

Q4:07

Q4:06

Q4:05

Q4:19

Q4:18

Q4:17

Q4:16

Q4:15

Q4:14

Q4:12

Q4:13

Cyprus

4

2

90


140

Egypt

2

-8

Q4:12

6

4

-6

Q4:11

150 Potential Output (rhs, Q1:06=100) Actual/Projected Output (rhs, Q1:06=100) Output Gap (%, lhs)

8

-8

4

100

Q4:10

80

8

Q4:04

110

-4

Q4:09

10

110

Q4:03

120

-2

Q4:08

1,4 1,2 1,0 0,8 0,6 0,4 0,2 0,0 -0,2 -0,4 -0,6 -0,8 -1,0

85

FYROM

0

Q4:07

-8

Q4:06

130 0

Q4:06

80

Q4:05

140

2

Q4:05

90 -6

Q4:04

4

Q4:04

95

Q4:04

90

Q4:03


Q4:03

100

Cyprus

Albania 10

6

Bulgaria

Albania

Q4:19

Q4:18

Q4:17

Q4:16

Q4:15

Q4:14

Q4:13

Q4:12

Q4:11

Q4:10

Q4:09

Q4:08

Q4:07

Q4:06

Q4:05

Q4:04

Q4:03

85

Egypt

90

-8

8

105

-2 -4

-8

Serbia

-6

95

125 115

Q4:03

-6

FYROM

100

130 120

Output Gap (% of Potential Output, 2017E)

Potential Output (rhs, Q1=06=100) Actual/Projected Output (rhs, Q1:06=100) Output Gap (%, lhs)

-4

100


-4

Serbia

-2

135

110

Q4:19

Q4:18

Q4:17

Q4:16

Q4:15

Q4:14

Q4:13

Q4:12

Q4:11

Q4:10

Q4:09

Q4:08

Q4:07

Q4:06

Q4:05

Q4:04

Q4:03

-8

2

Q4:11

-6

120

Q4:10

-4

2

Q4:09

-2

140 Potential Output (rhs, Q4:06=100) Actual/Projected Output (rhs, Q4:06=100) Output Gap (%, lhs)

4

Q4:08

0

140

8

130

4

Q4:07

2

10

6

Q4:06

4

150

6

Q4:03

6

Bulgaria

8

Q4:05


8

Q4:04

10

10

5

6 4 4

3 3 2 2

4 4 2 2 0 0

2 2 1 1

0 -2

0 0

-2

0 -1 -1 -4 -4

-2 -2 -6

-8

2,0 2,0

0,5 0,5

-1,0 -1,0

-2,5 -2,5

-4,0 -4,0

-5,5 -5,5

-7,0 -7,0

11 9 7 5 3 1 -1 -3 -5 -7 -9 -11

Albania 11 9 7 5 3 1 -1 -3 -5 -7 -9 -11


8 7 6 5 4 3 2 1 0 -1

2016 Q3:17

9 8

6 6 6 6

3 3 4 4

2 2

0 0 0 0

-3 -3 -2 -2

-6 -6 -4 -4

Cyprus Employment (y-o-y % change)

Q2:07 Q4:07 Q2:08 Q4:08 Q2:09 Q4:09 Q2:10 Q4:10 Q2:11 Q4:11 Q2:12 Q4:12 Q2:13 Q4:13 Q2:14 Q4:14 Q2:15 Q4:15 Q2:16 Q4:16 Q2:17 Q4:17 Q2:18 Q4:18

n.a.


Romania

-3 -3 -6

-4 -4 -8

Employment (y-o-y % change) 8 7 6 5 4 3 2 1 0 -1


6 5 4 3 2 1 0 -1 -2 -3 -4


3,5

Bulgaria

3,5

Turkey

5

6

-2

Albania

Serbia

Cyprus

Non-farm

Egypt

Total

Serbia

8


8

-4

Romania


-4

FYROM


Turkey Employment (y-o-y % change)



Employment growth (y-o-y % change) Employment in most countries under review should be supported by buoyant economic activity this year

6 6 6

Bulgaria 6

4 4

-2

Employment FYROM (y-o-y % change)

Egypt Employment (y-o-y % change)

6 5 4 3 2 1 0 -1 -2 -3 -4

8

11

8

6 6

Total


6

5

4

3

Non-farm

Serbia

14 14 4

12 12 0

10 10

Albania 2016 Q3:17


8 8


10

9

Romania 9

8

7

6

5

4

3

26 26 24 Unemployment Rate (%) 24

24 24 20 20

22 22 16 16

20 20 12 12

18 18

16 16 8 8

4

0

19 19

19

Cyprus Rate (%) Unemployment 19

18 18

17 17

17 17

15 15

16 16

13 13

11 11

15 15

9 9

14 14

7 7

13 13

5 5

12 12

3 3

Quarterly Chartbook / Q1:2018 Q2:07 Q4:07 Q2:08 Q4:08 Q2:09 Q4:09 Q2:10 Q4:10 Q2:11 Q4:11 Q2:12 Q4:12 Q2:13 Q4:13 Q2:14 Q4:14 Q2:15 Q4:15 Q2:16 Q4:16 Q2:17 Q4:17 Q2:18 Q4:18

10

FYROM

12

Albania

12

Serbia

14

Egypt

Turkey Unemployment Rate (%)

Turkey

14

Cyprus

16

Bulgaria

16


Q2:07 Q4:07 Q2:08 Q4:08 Q2:09 Q4:09 Q2:10 Q4:10 Q2:11 Q4:11 Q2:12 Q4:12 Q2:13 Q4:13 Q2:14 Q4:14 Q2:15 Q4:15 Q2:16 Q4:16 Q2:17 Q4:17 Q2:18 Q4:18 18

Romania


18



Unemployment rate (%) The unemployment rate should continue on its downward trend this year in all countries under review

14

Bulgaria 14

13 13

12 12

11 11

10

9

10

9

8 8

7 7

6 6

5 5

4 4

35

FYROMRate (%) Unemployment 35

32 32

29 29

26 26

23 23

20 20

14

EgyptRate (%) Unemployment 14

13 13

12 12

11 11

10 10

9 9

8 8

12

Serbia

8

0

0 0

-8 -8

-16

Nominal

25 25

20 20

Public sector wages

Nominal

-5

Real


-16

Real

Albania 8

Nominal

Real

2016 Q3:17 * Net

Nominal

Real Gross Wages (y-o-y % change)

15

12 12

9 9

6

3 6

n.a.

3

-3

Cyprus Gross Wages (y-o-y % change)

6

-4 0

-3

5 5

0 0

0 0

-2 -2

-4

Real


16 14 12 10 8 6 4 2 0 -2 -4 -6

**Public sector

Nominal

Nominal

2013

8 Nominal

2012

Real

2011

16

-10

2010

16 -5

2009

24

0

2008

24 5

2007

-5

-12

5

2006

-8

10

2005

-8 10

2004

-4

15

2003

-4 20

2002

0

25

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

0

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

4

Romania

2001

4

Egypt

8

Romania

8

Albania*

12

Bulgaria

Nominal

30

Turkey

12

Serbia

16

FYROM**

16

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18


-12 20

Cyprus

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

20

Turkey Gross Wages in Manufacturing (y-o-y % change)



Nominal and real wages (y-o-y % change) Real wages continue to post strong growth in Romania, Bulgaria and Albania, boosting private consumption

30 27 27

25 24 24

20 21 21

15 18 18

15 15

12 12

Bulgaria

9 9

0 6 6

-5 3 3

-10 0 0

Real

FYROM Average Net Wages (y-o-y % change) 16 14 12 10 8 6 4 2 0 -2 -4 -6

Real

8 35 35

6 30 30

25 25

Gross Wages Egypt (y-o-y % change)

15 15

4 4 20 20

10 10

2 2 15 15

10 5

10

5

0 0

-5

-10

-5

-10

Real

13

Nominal wages in EUR and tax rates FYROM and Albania are the most competitive in terms of labour costs Bulgaria and FYROM have the most favourable personal and corporate income tax rates

Gross Wages (Monthly Average, EUR, 2017)

1 900

Tax Rates (%) 1 900

750

750

600

600

450

450


Cyprus

Turkey**

Romania

Serbia

Bulgaria

FYROM*

Albania**

300

300

Egypt

n.a.

*: Net

Personal Income

Corporate Income

Turkey

15.0 - 35.0

22.0

Romania

10.0

16.0

Bulgaria

10.0

10.0

Serbia

10.0

15.0

FYROM

10.0

10.0

Albania

13.0 - 23.0

15.0

Cyprus

20.0 - 35.0

12.5

Egypt

10.0 - 22.0

23.0

Greece

22.0 - 45.0

29.0

**: 2016


14

External trade (12-month rolling, y-o-y % change) Buoyant exports in all the economies under review should sustain economic activity this year Romania 30

20

20

10

10 0

50

30

30

40

40

20

20

30

30

20

20

10

10

10

0

0

-10

-10

-20

-30 -40

-10

-20

-20

-30 -40

-10

-20

-20

-30

-30

-30

-30

-40

-40

-40

-40

Exports

Serbia 35

25

25

15

15

5

5

-5

-5

-15

-15

-25

-25

-35

-35

60

Imports

Exports

Exports & Imports (12-M Rolling Sum, % of GDP, December 207)

50

40

40

30

30

25

25 0


-25

Exports

20

10

10

Imports


0 -10

10

10

-20

-20

-30

-30

-40

-40

Imports

Bulgaria

FYROM*

Serbia

Romania

Turkey

Cyprus*

Egypt*

Albania*

0

Exports

* September 2017

30 25 20 15 10 5 0 -5 -10 -15 -20 -25 -30

30 25 20 15 10 5 0 -5 -10 -15 -20 -25 -30

Q2:07 Q4:07 Q2:08 Q4:08 Q2:09 Q4:09 Q2:10 Q4:10 Q2:11 Q4:11 Q2:12 Q4:12 Q2:13 Q4:13 Q2:14 Q4:14 Q2:15 Q4:15 Q2:16 Q4:16 Q2:17 Q4:17

50

-25

30

20

-10

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18 50

0

40

30

Cyprus

75

50

40

20

Exports

100

FYROM External Trade (EUR terms, y-o-y % change)

20

Albania

75

50

Imports

0

Imports

100

60

50

0

Exports

0

-20

Imports

35

0 -10

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

-10

Exports

10


0

50

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

30

40

Exports Exports excl. ships (available from Q1:15) Imports Imports excl. ships (available from Q1:15)


Imports

External Trade Egypt (USD terms, y-o-y % change) 40

40

30

30

20

20

10

10

0

0

-10

-10

-20

-20

-30

-30


40

Bulgaria

40

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

40

Turkey External Trade (USD terms, y-o-y % change)

Exports

Imports

15

CPI-based real effective exchange rate Competitiveness in all the countries under review has improved over the past 6 years, excluding Albania

15

134

5 0 -5 -10

118

-15

114

-20

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18 REER (level, 2000=100, left scale) REER (y-o-y % change, right scale)

18 15

12 6

175 0 165

155

10 5

0

0

-5

-5

-12

-15

-15

-20

-20

-25

-25

Egypt 2 0 -4

-6

105 100 95

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

-10

REER (level, 2000=100, left scale) REER (y-o-y % change, right scale)


90 85

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

-8

FYROMREER CPI-based

12 9

98

6

3 94 0 -3

90

-6 86

-9

EgyptREER CPI-based

-6

96

136


8 6 4 2 0 -2 -4 -6 -8 -10 -12

-2

100

-3

CPI-based CyprusREER 110

4

104

0 140

102

-10

6

108

3

15

5

Albania 112

12-M Average REER (December 2011-December 2017, % change)

10


144

REER (y-o-y % change, right scale)

-10

-18

6

REER (level, 2000=100, left scale)

-6

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

145

9 148

Albania

185

12

REER (y-o-y % change, right scale)

Serbia

Serbia

Turkey

195

Bulgaria 152

REER (level, 2000=100, left scale)

Romania

60

122

FYROM

70

126

Bulgaria

80

130

Cyprus

90

8 6 4 2 0 -2 -4 -6 -8 -10 -12

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

10

Romania

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

138

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

100

20



130

30

120

20

110

10

100

0

90

-10

80

-20

70

-30

60

-40

50

-50

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

Turkey CPI-based REER 110


16

Current account balance (12-month rolling, % of GDP) The current account deficit is set to remain at sustainable levels this year in most of the economies under review, on the back of strong external demand Bulgaria remains by far the best performer among the economies under review

Current Account Balance Current Account Balance (excluding Energy)

Serbia 0

Bulgaria 2 0 -2 -4 -6 -8 -10 -12 -14 -16

10

10

5

5

0

0

-5

-5

-10

-10

-15

-15

-20

-20

-25

-25

-30

-30

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

4 2 0 -2 -4 -6 -8 -10 -12

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

4 2 0 -2 -4 -6 -8 -10 -12

Romania 2 0 -2 -4 -6 -8 -10 -12 -14 -16

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

Current Turkey Account Balance (12-M Rolling Sum, % of GDP)

Current Account Balance

Current Account Balance

Current Account Balance (excluding Energy)

Current Account Balance (excluding Energy)

Current Account Balance (% of GDP, FY:17)

0

-4

-4

-8

-8

Current FYROM Account Balance (12-M Rolling Sum, % of GDP)

4

4

12

2

2

8

12 8

0

0

4

4

-2

-2

0

0

-12

-12

-4

-4

-4

-4

-16

-16

-6

-6

-8

-8

-20

-20

-8

-8

-12

-12

-24

-10

-16

-16


Bulgaria



Current Cyprus Account Balance (4-Q Rolling Sum, % of GDP)

6

3

3

0

0

-3

-3

-6

-6

-9

-9

-12

-12

-15

-15

-18

-18



0 -2 -4 -6 -8 -10 -12 -14 -16 -18

6

Current Account Balance Current Account Balance (excl. Energy)


Current Account Egypt Balance (4-Q Rolling Sum, % of GDP) 2 1 0 -1 -2 -3 -4 -5 -6 -7 -8

2 1 0 -1 -2 -3 -4 -5 -6 -7 -8


FYROM*

Turkey

Serbia

Romania


*: Estimate

Albania 0 -2 -4 -6 -8 -10 -12 -14 -16 -18

Cyprus*


Egypt*

Albania*

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

-24

-10


17

11 11

10

9

10

9

8 8

7 7

6 6

5 5

4 4


12 12

10 10 8 8

8 8 6 6

6 6 4 4

4 4 2 2

2 2 0 0

0 0 10

Albania *: Estimate

50 40 30 20 10 0 -10 -20 -30 -40 -50


9

8 8

7 7

6 6

5 5

4 4

3 3

2 2

1 1

0 0

10

50 40 30 20 10 0 -10 -20 -30 -40 -50


06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

9

Romania

FDI (% of GDP, 2017)

10

FDI Cyprus (4-Q Rolling Sum, % of GDP)


Serbia

Albania*

0

Serbia

0

Cyprus*

1

Egypt*

1

Romania

2

FYROM*

2

Bulgaria

3

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

Turkey FDI (12-M Rolling Sum, % of GDP)

Turkey

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

3



Net foreign direct investments (12-month rolling, % of GDP) Net FDI remains close to historically low levels in most of the countries under review. In Albania, net FDI continues to fluctuate around 8% of GDP for a 9th consecutive year, mainly on the back of large investments in energy projects

25

Bulgaria 25

20 20

15 15

10 10

5 5

0 0

FDI FYROM (12-M Rolling Sum, % of GDP)

10

10

8 8

6 6

4 4

2 2

0 0

Egypt FDI (4-Q Rolling Sum, % of GDP) 10

8 8

6 6

4 4

2 2

0 0

-2 -2

18

Other net capital flows, excluding IMF funding and net errors and omissions (12-month rolling, % of GDP) Other net capital flows to improve sharply in FYROM and Bulgaria this year. The slower absorption of EU funds at the onset of the new EU programming period in Bulgaria and the protracted political uncertainty in FYROM were behind the past year’s negative “other (net) capital flows”

10

12 10

8

Romania

12

12

9

9

6

6

8

6

6

4

4

2

2

0

0

3

0

0

-2 -3

Serbia

16

16

12

12

8

8

4

4

0

0

-4

-4

-8

-8

Albania


2

2

4

4

0

0

2

2

-2

-2

0

0

-4

-4

-6

-6

-2

-2

-4

-4

*: Estimate

Cyprus Other Investment (4-Q Rolling Sum, % of GDP) 50 40 30 20 10 0 -10 -20 -30 -40 -50

8


Egypt*

6

Turkey

6

Romania

4

Albania*

4

Cyprus*

8

Serbia

6

OtherEgypt Investment (4-Q Rolling Sum, % of GDP)

50 40 30 20 10 0 -10 -20 -30 -40 -50



14 12 10 8 6 4 2 0 -2 -4

Other Investment FYROM (12-M Rolling Sum, % of GDP)

6

Bulgaria

14 12 10 8 6 4 2 0 -2 -4 -6 -8

14 12 10 8 6 4 2 0 -2 -4

20

Other Investment (% of GDP, 2017)

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

14 12 10 8 6 4 2 0 -2 -4 -6 -8

24

20

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

-4

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

-4

-3

FYROM*

-2

3

Bulgaria 24


10

10

8

8

6

6

4

4

2

2

0

0

-2

-2

-4

-4

-6

-6

-8

-8


OtherTurkey Investment (12-M Rolling Sum, as % of GDP)

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

12

19

Foreign exchange reserves In all countries under review, import cover largely surpasses the critical level of 3 months Turkey FX Reserves 118

6

Romania

37

34

108

10

9

22

9

8

20

28

7

18

88

22

4

19 4

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

13

3

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

IMF/EU Disbursements (EUR bn, left scale)

11

10

10 9

8

8

7

7

6

6

5

5

4

4

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

9

10

4

FX Reserves (EUR bn., left scale)

6 4

1,6

5,0

4,5

1,5

4,0 3,5

1,1

3,0

2 n.a.

0,7

Cyprus

Bulgaria

Egypt

Albania*

Serbia

0

2,5

IMF Disbursements (EUR bn., left scale) FX Reserves (excl. IMF, EUR bn, left scale) Months of Import of GNFS (right scale)

* September 2017

Cyprus

Egypt FX Reserves

7,0 6,0

5,0 1,9

4

2

40

9

35

8 7

30

6

N.A.

25 5 20

1,2 4,0

0,8

3,0

IMF Disbursements (EUR bn, left scale) FX Reserves (EUR bn, excl. IMF, left scale) Months of imports of GNFS (right scale)


4

15

3

10

2

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

0,4

6,0 5,5

6

Critical Level

2,4 2,0

FXFYROM Reserves

8

FYROM* 8,0

2,7 10

2,3 8

0

IMF Disbursements (EUR bn, left scale) FX Reserves (EUR bn, excl. IMF, left scale) Months of imports of GNFS (right scale)

2,8

10

Months of Imports of GNFS (right scale)

FX Reserves (Months of Imports of GNFS, Dec. 2017)

12

11

Albania

5

Months of Imports of GNFS (right scale)

Romania

Serbia

12

FX Reserves (excl. IMF and EU, EUR bn, left scale)

FX Reserves (in USD bn, left scale) Months of import of GNFS (right scale)

Turkey

58

6

14 5

16

68

7

16

06/08 11/08 04/09 09/09 02/10 07/10 12/10 05/11 10/11 03/12 08/12 01/13 06/13 11/13 04/14 09/14 02/15 07/15 12/15 05/16 10/16 03/17 08/17 01/18 06/18 11/18

78

6

8

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

5

25

3,2

24

31

98

12

Bulgaria

10

IMF Disbursements (USD bn, left scale) FX Reserves (USD bn, left scale) Months of Import of GNFS (right scale)


20

Short-term external debt-to-Foreign exchange reserves ratio (%) Short-term external debt is comfortably covered by FX reserves in all countries under review, with the exception of Turkey

160

140

140

120

120

100

100 80

60

60

40

40

20

20

80

70

70

60

60

50

50

40

40

30

30

20

20

Bulgaria 120 110 100 90 80 70 60 50 40 30 20

120 110 100 90 80 70 60 50 40 30 20

Short-Term External Debt Short-Term External Debt excluding Trade Credits Short-Term External Debt excluding Interbank Lending

Short-Term External Debt Short-Term External Debt excluding Trade Credits

Serbia 24

90

80


80

Romania

90


Turkey Short-Term External Debt / FX Reserves (%)


160

24

Short-Term External Debt / FX Reserves (%, Q4:17)

140

Short-Term External Debt Short-Term External Debt excluding Trade Credits

140

100

Short-term External Debt / FYROM FX Reserves (%)

100

90

90

80

80

20

120

120

16

16

100

100

70

70

80

80

60

60

60

60

50

50

40

40

40

40

30

30

20

20

0

Albania

20 0

Serbia*

Short-Term External Debt

70

n.a.

Cyprus

0


0

20

Turkey

4

FYROM*

4

Romania

8

Albania*

8

Bulgaria*

12

Egypt*

12


20

Short-term External Debt Short-term External Debt excluding Trade Credits

* September 2017

Cyprus 60

70

Short-TermEgypt External Debt / FX Reserves (%)

60

60

60

50

50

50

40

40

40

40

30

30

30

30

20

20

20

20

10

10

10

10

0

Short-Term External Debt

Short-term External Debt Short-term External Debt excluding Trade Credits

Short-Term External Debt excluding Trade Credits


0



N.A.

50


21

Balance of payments (12-month rolling, % of GDP)

The current account deficit is expected to ease this year in all countries under review, excluding Romania and FYROM; however, more than half of it should be covered by non-debt generating FDI

Turkey

Romania

2014

2015

2016

2017

2018F

Current account balance

-0.7

-1.2

-2.1

-3.6

-4.4

1.0

Net FDI

1.8

1.8

2.7

2.5

2.6

3.6

3.8

Other net capital inflows *

0.9

0.7

0.3

1.9

1.8

2016

2017

2018F

2014

2015

2016

2017

2018F

0.0

5.3

3.9

2.6


-6.0

-4.7

-3.1

-5.7

-5.0

2.1

5.1

0.7

1.2

1.4

Net FDI

3.7

5.4

5.6

6.6

6.2

5.1

-0.5

-0.3

-5.3

-0.4


-2.3

-0.9

-4.9

-1.3

-0.4

2014

2015

2016

2017E

2018F

2014

2015

2016

2017E

2018F

-0.5

-1.9

-2.7

-2.2

-2.4


-10.8

-8.6

-7.6

-8.5

-7.9

Net FDI

2.3

2.2

3.3

1.8

1.9

Net FDI

8.1

8.0

8.7

8.7

8.0


3.7

-0.6

3.1

-2.3

6.2


2.5

4.3

-3.3

-0.5

0.4

2014

2015

2016

2017E

2018F

Egypt

2014

2015

2016

2017

2018F

-4.3

-1.5

-4.9

-4.8

-4.2


-0.8

-3.7

-6.0

-6.6

-5.4

7.9

---

7.8

5.8

6.3

Net FDI

1.3

1.9

2.0

3.3

3.5

-5.5

---

-1.0

-1.0

-2.1


0.9

4.0

5.6

7.7

1.9

2014

2015

2016

2017

2018F


-4.7

-3.7

-3.8

-5.5

-4.8

Net FDI

0.6

1.5

1.2

1.0


3.9

-0.3

1.5

2014

2015


0.1

Net FDI Other net capital inflows *

Bulgaria

FYROM Current account balance

Cyprus Current account balance Net FDI Other net capital inflows *

Serbia

Albania

#

*: excluding IMF and ESM funding and net errors and omissions, #: Fiscal year ending on June 30 th



22

External financing Among the countries under review, only Romania is expected to resort to FX reserves this year to fill the financing gap

Turkey (USD bn)

2016

2017E

2018F

Romania (EUR bn)

2016

2017E

2018F

Bulgaria (EUR bn)

2016

2017E

2018F

Financing Needs

194.9

215.1

224.3

Cur. Acct Deficit Amort. + Other Financing Sources FDI IMF Other IFIs Other Change in FX Res.

33.1 161.8 194.0 10.2 0.0 n.a. 183.8 -0.9

47.1 168.0 207.2 8.1 0.0 n.a. 199.1 -7.9

44.3 180.0 224.3 8.8 0.0 n.a. 215.5 0.0

Financing Needs Cur. Acct Deficit Amort. + Other Financing Sources FDI IMF Other IFIs Other Change in FX Res.

55.1 3.5 51.6 57.1 4.5 -0.1 0.0 52.7 2.0

38.1 6.5 31.6 37.4 4.6 0.0 -0.7 33.5 -0.7

42.3 8.6 33.7 40.9 5.0 0.0 -1.4 37.3 -1.4


9.2 -2.6 11.8 12.7 0.3 0.0 n.a. 12.4 3.5

10.6 -2.0 12.6 10.4 0.6 0.0 n.a. 9.8 -0.2

9.7 -1.4 11.1 11.7 0.8 0.0 n.a. 10.9 2.0

2018F

FYROM (EUR bn)

2016

2017E

2018F

Albania (EUR bn)

2016

2017E

2018F


2.2 0.3 1.9 2.6 0.3 0.0 n.a. 2.2 0.4

2.1 0.2 1.9 1.8 0.2 0.0 n.a. 1.6 -0.3

2.2 0.3 1.9 2.8 0.2 0.0 n.a. 2.6 0.6


1.0 0.8 0.2 1.1 0.9 0.1 0.0 0.0 0.1

Serbia (EUR bn)

2016

2017


4.2 1.1 3.2 4.1 1.9 0.0 0.0 2.2 -0.2

6.8 2.1 4.7 6.5 2.4 0.0 0.0 4.1 -0.2

6.1 2.0 4.2 6.4 2.4 0.0 0.0 4.0 0.3

Cyprus (EUR bn)

2016

2017E

2018F


46.3 0.9 45.4 46.3 1.4 0.0 0.0 44.9 0.0

46.8 0.9 45.9 46.8 1.1 0.0 0.0 45.7 0.0

48.4 0.8 47.6 48.4 1.3 0.0 0.0 47.1 0.0


Egypt (USD bn)

15/16

16/17E

17/18F


29.8 19.8 10.0 27.3 6.7 0.0 n.a. 20.6 -2.5

30.6 15.6 15.0 44.4 7.7 2.7 2.5 31.5 13.8

25.9 13.6 12.3 31.1 8.8 5.2 2.5 14.6 5.2


1.2 1.0 0.2 1.3 1.0 0.1 0.2 0.0 0.1

1.2 1.0 0.2 1.3 1.0 0.0 0.1 0.2 0.1

23

External debt (% of GDP) The external debt-to-GDP ratio does not exceed 80% in the countries under review, with the exception of Cyprus

50 30 40 30

25

20 20 10 15


0

Romania

100 90 80 70 60 50 40 30 20 10 0

Serbia

32

100

28

80 60 40

20 16

20 0

Public Sector (lhs) Banking Sector (lhs) Non-Financial Private Sector (lhs) Intercompany Lending (lhs) Short-Term Debt (as % of Gross External Debt, rhs)

14

Bulgaria

100 600

External Debt (as % of GDP, Q4:17)

36 34 32 30 28 26 24 22 20

Public Sector (lhs) Banking Sector (lhs) Non-Financial Private Sector (lhs) Intercompany Lending Short-Term Debt (as % of Gross External Debt, rhs)

Gross ExternalFYROM Debt (as % of GDP)

100 600

80

80

80

60

35

60

60

40

30

40

40

20

25

20

20

0

20

40

12

80

10 60

8

40

6 4

20


0

22

40 18

30 20

14

10

10


0

Public Sector (lhs) Banking Sector (lhs) Non-Financial Private Sector (lhs) Intercompany Lending (lhs) Short-term External Debt (as % of Total Debt, rhs)


Egypt Gross External Debt (as % of GDP)

Cyprus

FYROM

Serbia*

Albania*

Bulgaria*

Romania

Turkey

900

60

35

750

55

30

16

50

25

14

45

20

12

40

15

10

35

10

8

150

30

5

6

0

25

0

4

600

450 300

Public Sector (lhs) Banking Sector (lhs) Non-Financial Private Sector (lhs) Intercompany Lending (lhs) Short-term External Debt (as % of Tot. Ext. Debt, rhs)


Q2:07 Q4;07 Q2:08 Q4:08 Q2:09 Q4:09 Q2:10 Q4:10 Q2:11 Q4:11 Q2:12 Q4:12 Q2:13 Q4:13 Q2:14 Q4:14 Q2:15 Q4:15 Q2:16 Q4:16 Q2:17 Q4:17 Q2:18 Q4:18

50

Gross External Debt (as % of GDP) Cyprus

30 26

60

Public Sector (lhs) Banking Sector (lhs) Non-Financial Private Sector (lhs) Intercompany Lending (lhs) Short-term External Debt (as % of Tot. Ext. Debt, rhs)

* September 2017


Albania

70

0

Egypt

0

Public Sector (lhs) Banking Sector (lhs) Non-Financial Private Sector (lhs) Short-term External Debt (as % of Gross External Debt, rhs)


2

0

80

120

24

Public Sector (lhs) Banking Sector (lhs) Non-Financial Private Sector (lhs) Short-Term External Debt (as % of Tot. Ext. Debt, rhs)

100

36


35


Gross ExternalTurkey Debt (as % of GDP) 60

18

Public Sector (lhs) Banking Sector (lhs) Non-Financial Private Sector (lhs) Total External Debt (lhs) Short-term External Debt (As % of Tot. Ext. Debt, rhs)

24

Real estate prices Real estate prices continued on an upward trend in Romania and Bulgaria in Q4:17, but remain well below their pre-crisis peak

House Price Index, Countrywide Source: Central Bank of Turkey

EUR Terms

TRY Nominal Terms

Romania

110

260 240 220 200 180 160 140 120 100 80

100

100

95

95

90

90

90

90

80

80

85

85

70

70

80

80

60

60

75

75

50

50

70

70

40 Asking Price, Apartments, Countrywide Source: Imobilare.ro 30

40

65 Housing Price Index, Countrywide 60 Source: National Statistical Institute

65

100

30

Q2:07 Q4:07 Q2:08 Q4:08 Q2:09 Q4:09 Q2:10 Q4:10 Q2:11 Q4:11 Q2:12 Q4:12 Q2:13 Q4:13 Q2:14 Q4:14 Q2:15 Q4:15 Q2:16 Q4:16 Q2:17 Q4:17 Q2:18 Q4:18 EUR Terms

TRY Adj. for inflation

Serbia 200

200

175

175

150

150

Bulgaria

110

RON Nominal Terms

RON adj. for inflation

BGN, EUR Nominal Terms

1600

118

118

1400

1400

114

114

1200

1200

1000

1000

110

110

106

106 102

800

800

100

100

600

600

102

400

400

98

75

200

200

94 House Price Index

50

0

140

140 130

130

120

120

110

110

100

100

90

80

Q2 07 Q4 07 Q2 08 Q4 08 Q2 09 Q4 09 Q2 10 Q4 10 Q2 11 Q4 11 Q2 12 Q4 12 Q2 13 Q4 13 Q2 14 Q4 14 Q2 15 Q4 15 Q2:16 Q4:16 Q2:17 Q4:17 Q2:18 Q4:18

80

90

Apartments, Tirana Source: Bank of Albania

EUR terms

ALL Nominal Terms

ALL, adj. for inflation


ResidentialCyprus Property Price Index (Q4:06=100)

MKD, EUR Nominal Terms

MKD, EUR, adj. for inflation

Egypt 130

120

120

110

110

100

100

80

90

140

130

90

94

Source: Central Bank of FYROM


Cyprus

Serbia

Romania

Turkey

Albania

Source: numbeo.com, EUR/m2 to buy apartment in city centre

Albania 140

Bulgaria

RSD, adj. for inflation

FYROM

RSD Nominal Terms

90

98

N.A.

90

House Price Index, Countrywide Source: Central Bank of Cyprus

80


EUR Terms

0

Egypt

Q2 07 Q4 07 Q2 08 Q4 08 Q2 09 Q4 09 Q2 10 Q4 10 Q2 11 Q4 11 Q2 12 Q4 12 Q2 13 Q4 13 Q2 14 Q4 14 Q2 15 Q4 15 Q2 16 Q4 16 Q2:17 Q4:17 Q2:18 Q4:18

50

BGN, adj. for inflation

FYROM Real Estate Price Index (Q1:08=100)

Real Estate Prices (EUR, Q4:17)

125

New Construction Dwellings, Countrywide Source: Statistical Office

60

1600

125

75

100


Turkey Real Estate Price Index (Q1:10=100)


260 240 220 200 180 160 140 120 100 80

EUR Nominal Terms

EUR, Adj. for Inflation


25

Inflation (%) Headline inflation accelerated in 2017 in most countries under review, mainly reflecting increased demand-side pressures and unfavourable volatile food and energy prices

Headline Inflation Core-C Inflation (excl. energy, food, beverages, tobacco and gold) Food Inflation

Headline Inflation

Serbia

9

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

H

Core Inflation

Food Inflation


6

3

3

12 10 8 6 4 2 0 -2 -4 -6 -8

15

15

10

10

5

5

0

0

-5

-5

Headline Inflation Core Inflation (excl. volatile food & energy) Food Inflation

Core Inflation

10

8

8

6

6

4

4

2

2

0

0

-2

-2

-4

-4

Headline Inflation

Headline & Core Inflation Cyprus (y-o-y% change)

Headline Inflation

10

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

Egypt

Turkey

Romania

Serbia

Bulgaria

Albania

FYROM

0

Cyprus

0

Food Inflation

8 7 6 5 4 3 2 1 0 -1 -2

9

6

Albania

Headline Inflation

20

Headline FYROM & Core Inflation (y-o-y % change) 12

12 10 8 6 4 2 0 -2 -4 -6 -8

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

Core Inflation

25

20

Food Inflation

12

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

40 35 30 25 20 15 10 5 0 -5

8 7 6 5 4 3 2 1 0 -1 -2

Adjusted Core II Inflation

Bulgaria

25

Headline Inflation (y-o-y % change, 2018F, eop)

40 35 30 25 20 15 10 5 0 -5

Headline Inflation

16 14 12 10 8 6 4 2 0 -2 -4 -6 -8

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

Romania

16 14 12 10 8 6 4 2 0 -2 -4 -6 -8

Food Inflation


45 40 35 30 25 20 15 10 5 0

Core Inflation

Food Inflation

Headline &Egypt Core Inflation (y-o-y % change)

45 40 35 30 25 20 15 10 5 0

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

18 16 14 12 10 8 6 4 2 0

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

HeadlineTurkey & Core Inflation (y-o-y % change)

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

18 16 14 12 10 8 6 4 2 0

Headline Inflation

Core Inflation

Food Inflation

26

CPI-based nominal effective exchange rate The EGP and TRY have depreciated significantly in nominal terms over the past 6 years

90

80 70 60 50

122

6

121

60

3

120

0

119

-3

118

58 56 54

-6

52 50

-9

48

-12

46

-15

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

40

NEER (level, 2000=100, left scale) NEER (y-o-y % change, right scale)

70

Serbia

5

60

0 55

Albania

0

FYROM CPI-based NEER 9

-10

-10

145

6

-20

-20

140

3

-30

-30

135

0

-40

-40

130

-3

-50

-50

-60

-60

125

-6

-4 -6

102

-8

-10

98

Albania

FYROM

Bulgaria

CPI-based EgyptNEER 10

8 105

6 4

100

2 0

95

-2 -4

90

-12



-6 85

-8

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

-14

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

94


CPI-based Cyprus NEER 110

-2 106

-6

0

0

2 110

113

12

Egypt 4

-4

114

150


114

-2

115

155

Cyprus

-20

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

40

116

10

Romania

-15

0

117

NEER (y-o-y % change, right scale)

Serbia

45

2

NEER (level, 2000=100, left scale)

10

Turkey

-10

4

NEER (y-o-y % change, right scale)

-5 50

6

NEER (level, 2000=100, left scale)

12-M Average NEER (December 2011-December 2017, % change)

15 10

65

Bulgaria

9

62

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

100

Romania

64

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

110

16 12 8 4 0 -4 -8 -12 -16 -20 -24



120 110 100 90 80 70 60 50 40 30

20 10

0 -10 -20 -30 -40 -50 -60

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

CPI-based NEER Turkey

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

120


27

Policy rate Since the beginning of the year, only Romania has hiked its policy rates to contain inflationary pressures

18

16

16

14

14

12

12

10

10 8

6

6

4

4

2

2

0

0

O/N Borrowing Rate CBRT 1-week Repo Rate Effective Funding Rate (eop)

9

9

6

6

3 0

0

-3

O/N Lending Rate Overnight Interbank Rate Late Liquidity Window

Serbia

3

-3

Nominal Policy Rate

16

1

1 0

8

Albania

Turkey

FYROM

Real Policy Rate

Cyprus

Nominal Policy Rate

-3

Serbia

-3

Albania

-4

-2

Egypt

-4

-2

Romania

0

-1

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

0

-1

Bulgaria

4

2

0

0

-2

-2

-4

-4

-6

-6

-8

-8

Real Money Market Rate

(28-D CB Rate)

14

12

12

10

10

8

8

6

6

4

4

2

2

0

0

-2

-2

-4

-4

Nominal Policy Rate

Policy Rate Cyprus (ECB Main Refinancing Rate, %)

7

7

6

6

5

5

5

4

4

4

4

3

3

3

3

2

2

2

2

1

1

1

1

0

0

0

-1 -2

5

24

Real Policy Rate

Egypt Policy Rate (Overnight Deposit Rate, %)

24

20

20

16

16

12

12 8

4

4

0

0

0

-1

-1

-4

-4

-1

-2

-2

-8

-8

-2

-3

-3

-12

Real Policy Rate


06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

8

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18 Nominal Policy Rate

2

Policy Rate (%) FYROM 2

0

4

4

14

2

12

8

6

4

Nominal Money Market Rate

16

12

8

6

Real Policy Rate

Real Policy Rate (December 2017, eop)

20

Bulgaria

8

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

20

12

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

8

Romania

12

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

Policy Rate (%) Turkey (1-w CBRT Repo Rate)

Nominal Policy Rate

Real Policy Rate


-12

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

18

Nominal Policy Rate

Real Policy Rate

28

Reserve requirement ratios The Bank of Albania has announced that it will proceed with a cut in RRR on LC liabilities (by 2.5 pps to 7.5%) and a hike in RRR on FX liabilities (by 2.5 pps to 12.5%) in June, in an effort to reduce the euroisation of the economy Turkey

Romania

Reserve Requirement Ratios (Average, %) Dec. 2016

Dec. 2017

Feb. 2018

LC Liabilities

10.1

10.1

10.1

FC Liabilities

13.0

12.4

12.4

Bulgaria Reserve Requirement Ratios (%)

Reserve Requirement Ratios (%) Dec. 2016

Dec. 2017

Feb. 2018

LC Liabilities

8.0

8.0

8.0

FC Liabilities

10.0

8.0

8.0

Serbia

Dec. 2016

Dec. 2017

Feb. 2018

LC Liabilities

10.0

10.0

10.0

FC Liabilities

5.0

5.0

5.0

FYROM

Reserve Requirement Ratios (%)

Albania Reserve Requirement Ratios (%)


Dec. 2016

Dec. 2017

Feb. 2018

LC Liab.

0.0 - 5.0

0.0 - 5.0

0.0 - 5.0

FC Liab.

13.0 - 20.0

13.0 - 20.0 13.0 - 20.0

Dec. 2016

Dec. 2017

Feb. 2018

LC Liabilities

8.0

8.0

8.0

FC Liabilities

15.0

15.0

15.0

Dec. 2016

Dec. 2017

Feb. 2018

LC Liabilities

10.0

10.0

10.0

FC Liabilities

10.0

10.0

10.0

Cyprus

Egypt



Dec. 2016

Dec. 2017

Feb. 2018

LC Liabilities

1.0

1.0

1.0

FC Liabilities

1.0

1.0

1.0


Dec. 2016

Dec. 2017

Feb. 2018

LC Liabilities

10.0

14.0

14.0

FC Liabilities

10.0

14.0

14.0


29

Fiscal balance (12-month rolling, % of GDP) A loose fiscal stance in Romania, Turkey, Bulgaria and Serbia this year should boost economic activity and employment In Turkey and Romania, the fiscal easing is unwelcome, in view of strong overheating pressures

Turkey

Romania

Bulgaria

2014

2015

2016

2017

2018F

2014

2015

2016

2017

2018F

2014

2015

2016

2017

2018F

-1.1

-1.0

-1.1

-1.5

-2.0

-1.7

-1.5

-2.4

-2.9

-4.0

-3.7

-2.8

1.6

0.8

-0.5

Serbia

FYROM

Albania

2014

2015

2016

2017

2018F

2014

2015

2016

2017

2018F

2014a

2015a

2016

2017E

2018F

-6.6

-3.7

-1.3

1.2

0.3

-4.2

-3.5

-2.7

-2.7

-2.8

-5.2

-4.1

-1.8

-2.2

-2.0

a: Including the clearance of arrears, worth 2.4% of GDP in FY:14 and 1.2% of GDP in 2015

Cyprus

Egypt

2014

2015

2016

2017E

2018F

2014

2015

2016

2017

2018F

-8.8

-1.2

0.5

1.5

1.5

-12.2

-11.4

-12.5

-10.9

-9.5

*: Fiscal year ending on June 30th.



30

Fiscal performance A very tight fiscal stance in Cyprus and Serbia in 2017 helped reduce significantly the public debt-to-GDP ratio

Romania

15 12 9 6 3 0 -3 n.a -6 -9 -12 -15

8

6

4

0

-4 -6

-2

-2 -4

Tax Revenue,FYROM Primary Expenditure & Fiscal Balance (12-M Rolling Sum)

30

9

-6

-8

-8

-8

-10

-10

-12

-12


-20

-6

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

-3

Fiscal Balance (% of GDP, right scale) Primary Expenditure (y-o-y % change, left scale) Tax Revenue (y-o-y % change, left scale)

Cyprus Tax Revenue, Primary Expenditure & Fiscal Balance (12-M Rolling Sum)

20

10 0 -10 -20 -30

14 12 10 8 6 4 2 0 -2 -4 -6 -8 -10 -12 -14



60 40 20 0 -20 -40 -60 -80 -100 -120 -140

Egypt Expenditure Tax Revenue, Primary & Fiscal Balance (12-M Rolling Sum)

6 4 2 0 -2 -4 -6 -8 -10 -12 -14

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18 Fiscal Balance (excl. clearance of arrears, % of GDP, right scale) Clearance of Arrears (% of GDP, right scale) Tax Revenue (y-o-y % change, left scale) Primary Expenditure (excl. arrears, y-o-y % change, left scale)

30

-10

*November ** October

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18 10 8 6 4 2 0 -2 -4 -6 -8 -10

Cyprus*

0

Serbia

0

-6

Bulgaria

-4

-6

Turkey

-4

FYROM

3

Romania

10

Albania*

-2

Egypt**

6

Albania

-30

-2

20

Fiscal Balance Excl. Act. Guarantees (% of GDP, right scale) Activated Guarantees (% of GDP, right scale) Tax Revenue (y-o-y % change, left scale) Primary Expenditure (y-o-y % change, left scale)

-20

4

0

0

-10

Fiscal Balance (12-M Rolling Sum, % of GDP, December 2017)

2

2

0

0

Fiscal Balance (% of GDP, right scale) Tax Revenue (y-o-y % change, left scale) Primary Expenditure (y-o-y % change, left scale)

2

4

10

2

Primary Expenditure (y-o-y % change, left scale)

Serbia

6

4

Tax Revenue (y-o-y % change, left scale)

25 20 15 10 5 0 -5 -10 -15 -20 -25

20

Bulgaria

25 20 15 10 5 0 -5 -10 -15 -20 -25

Fiscal Balance (% of GDP, right scale)

Fiscal Balance (% of GDP, right scale) Tax Revenue (y-o-y % change, left scale) Primary Expenditure (y-o-y % change, left scale)

30

10 8 6 4 2 0 -2 -4 -6 -8 -10

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

3 2 1 0 -1 -2 -3 -4 -5 -6

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

Tax Revenue,Turkey Primary Expenditure & Fiscal Balance (12-M Rolling Sum)

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

30 20 10 0 -10 -20 -30 -40 -50 -60


31

0 0

80

Serbia 80

60 60

40 40

20 20

0

80 80

70 70

60 60

50

0

120 120 120 120

100 100 100 100

50

80 80 80 80

40 40

60 60 60 60

30 30

40 40 40 40

20 20

10 10

20 20 20 20

0 0

0


0

Albania

40 40

35 35

30 30

25 25

20 20

15 15

10 5

10

5

0 0

Gross Public Debt (% of GDP, December 2017)

120

100 80 80

60 60

40 40

20 20

0

* September 2017



45

** June 2017


10

Romania 33 30 27 24 21 18 15 12 9 6 3 0

Cyprus Gross Public Debt (% of GDP)


10

Egypt**

20

Cyprus*

20

Albania

30

Serbia

30 45

FYROM

40

Romania

40

Turkey*

50



Turkey Gross Public Debt (% of GDP)

Bulgaria


50



Public debt (% of GDP) The public debt-to-GDP ratio is still at critical levels in Cyprus and Egypt despite a tight fiscal stance Bulgaria

0

33 30 27 24 21 18 15 12 9 6 3 0

Gross Public Debt (incl. guaranteed debt)

Fiscal Reserve Account

100

50

FYROM

Gross Public Debt (% of GDP) 50

40 40

30 30

20 20

0

10 10

0 0

Gross Public Debt (% of GDP)

Egypt

0

32

Exchange rates The TRY and EGP have depreciated against the EUR since the beginning of the year

4,5

4,5

2,0

2,0

4,0

4,0

1,8

1,8

3,0

3,5

3,5

1,6

1,6

2,5

3,0

3,0

1,4

1,4

2,5

2,5

1,2

1,2

2,0

2,0

1,0

1,0

4,0

3,5

3,5

3,0 2,5 2,0

2,0

1,5

1,5

1,0

1,0

EUR/RON

USD/TRY

120

120

ALL

110

110

BGN*

100

90

90

80

80

70

70

60

60

50

40

40

EGP MKD* RON TRY

-25

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

50

-10

-5

Depreciation

0

5

70

70

65

65

60

60

55

55

50

50

45

45

40

40

35

35

Appreciation

YTD change (%)

USD/RSD

Y-o-Y change (%)

EUR/MKD

*: MKD and BGN are pegged to the EUR

Albania

CyprusRates Exchange

150

150

140

140

130

130

120

120

110

110

100

100 90

80

80

70

70

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

90

EUR/ALL

-15

USD/ALL


1,6

1,6

1,5

1,5

1,4

1,4

1,3

1,3

1,2

22

USD/MKD

Egypt Exchange Rates

22

19

19

16

16

13

13

1,2

10

10

1,1

1,1

7

7

1,0

1,0

4

4

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

EUR/RSD

-20

USD/BGN

FYROM Exchange Rates

Currencies against the EUR (Feb. 26th 2018)

130

100

EUR/BGN

USD/RON

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

Serbia

2,2

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

4,5

4,0

130

Bulgaria

2,2

4,5

EUR/TRY

Romania

5,0

5,0

EUR/USD

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

Turkey Exchange Rates

5,0

5,0

USD/EGP


EUR/EGP

33

Money market rates (%) Money market rates have increasedsince the beginning of the year in almost all the countries under review 1-M Turkey TRIBOR (%)

Romania 20

18

18

16

16

14

14

12

12

10

24 21 18 15 12 9

10 8

6

6

4

4

6 3 0

8

21

7

7

18

6

6

15

5

5

12

4

4

9

3

3

6

2

2

3

1

1

0

0

0

-1

-1

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

8

1-M TRIBOR Effective Funding Rate (1-W Repo Rate before Oct. 2011) Overnight Interbank Rate

1-M ROBOR

Serbia

Bulgaria

24

1-Week Repo Rate

1-MFYROM SKIBOR (%)

Money Market Rates (1-month, %)

20

8

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

20

20

10

10

Egypt*

18

18

16

16

14

14

12 10

9

9

8

8

Serbia

7

7

12

Romania

6

6

10

FYROM

5

5

8

8

Cyprus

4

4

6

6

Bulgaria

3

3

4

4

2

2

2

2

1

1

Turkey

4

Feb. 26th 2018

6

8

10

12

14

16

18

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

2

20

Dec. 30th 2017

2-Week Repo Rate

1-M SKIBOR

* Overnight Interbank Rate

Albania 8,0

8,0

7,0

7,0

6,0

6,0

5,0

5,0

4,0

4,0 3,0

2,0

2,0

1,0

1,0

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

3,0

1-M TRIBOR

0

1-Week Repo Rate


Cyprus (%) 1-M EURIBOR

28-D CB Rate

Egypt (%) 1-M CAIBOR

5

5

4

4

3

3

2

2

1

1

0

0

-1

-1

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

1-M BELIBOR

-2

1-M EURIBOR (Not effective since Sep. 2011) ECB Main Refinancing Rate


19 18 17 16 15 14 13 12 11 10 9 8

19 18 17 16 15 14 13 12 11 10 9 8

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

Albania

1-M CAIBOR (O/N Interbank Rate since Jan. 2016) Overnight Deposit Rate

34

Government debt yields (%) Government debt yields have also increased since the start of the year in almost all the countries under review

18

200 100

14

0

10

-100 -200

6

-300 -400

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

2

5-Y Bond Yield (lhs)

8 300 200

14

-100

100

8

Turkey

0

4 -100

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

2

Albania

9,0 8,0 7,0 6,0 5,0 4,0 3,0 2,0


8

90 60 30 0

4

Cyprus*

3

Bulgaria

2

-60

1

-90

Albania**

0

5

10

15

20

Dec. 30th 2017 * 3-Year (%)

2-Y Bond Yield (bps, lhs) 2-Y Bond / 1-M TRIBOR Spread (bps, rhs)

120

FYROM**

Feb. 26th 2018

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

1,0

9

5

-5

400 350 300 250 200 150 100 50 0 -50 -100

-100

6

Romania

12-M TB Yield (bps, lhs) 12-M TB / 1-M BELIBOR Spread (bps, rhs)

10,0

1

7

-30


** Primary market yields

Cyprus 7-Y Bond Yield (%)

1-Y Bond/ 1-Y SKIBOR Spread (bps, rhs)

Egypt 1-Y Bond Yield (%)

14

14

12

12

21

10

10

19

8

8

17

6

6

4

4

2

2

9

0

0

7

23

600 500 400 300 200 100 0 -100 -200 -300 -400

15 13

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

6

0

1-Y Bond Yield (%) FYROM

Serbia

10

100

10-Y Bond Yield (lhs) 10-Y Bond / 1M SOFIBOR Spread (bps, rhs)

Government Debt Yields (1-Year, %)

12

200

4

2

Egypt

200

300

3

0

300

* 53-week combounded since April 2011

400

6

10-Y Bond Yield (lhs) 10-Y Bond / 1M-ROBOR Spread (bps, rhs)

16

500

7

5 100

5-Y Bond/ 1-Y TRIBOR Spread (bps, rhs)

Serbia

18

Bulgaria

9

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

300

400

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

400

22

Romania

12 11 10 9 8 7 6 5 4 3 2

11

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

500

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

Turkey 5-Y Bond Yield (%) 26


7-Y Bond Yield (%)


1-Y Bond/ 1-Y CAIBOR Spread (bps, rhs)

35

Sovereign spreads (bps) Sovereign spreads have increased in Turkey, Serbia, Bulgaria and Egypt since the beginning of the year

v

Turkey

Romania

500

500

400

400

300

300

200

200

400

300

300

200

200

100

100

100 0

200

200

150

150

100

100

0

50

0

0

0

FYROM Eurobond Spread - MK EUR 3.975 2021

Sovereign Spreads (bps)

1.000

Egypt

Turkey*

800

250

EUR 2.0 2022

EUR 3.625 2024

Serbia 1.000

250

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

EUR 5.125 2020

300

50

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

0

400

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

100

Bulgaria 300

800

600

600

500

500

400

400

300

300

200

200

Serbia*

600

600

400

400

Romania FYROM

200

200

Cyprus

Bulgaria

100

Albania

0

200

250

0

Dec. 30th 2017

800

600

600

400

400

200

200 EUR 5.75 2020

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

0


Egypt Eurobond Spread - EG USD 5.75 2020 1.600

700

700

1.400

1.400

600

600

1.200

1.200

500

500

1.000

1.000

400

400

300

300

200

200

800

800

600

600

400

400

200

0

200

EUR 4.625 2020

0


100 0

100 USD 5.75 2020

0

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

800

0

1.600

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

1.000

0

150

Cyprus Eurobond Spread - CY EUR 4.625 2020 1.200

1.000

100

*Spread over US Treasuries

Albania 1.200

50 Feb. 26th 2018

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

0

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

0

100 EUR 3.975 2021

USD 3.75 2024

36

Stock market Stock markets in the countries under review have either stabilised or posted gains since the start of the year

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

.XU100, '000

1,8 1,7 1,6 1,5 1,4 1,3 1,2 1,1 1,0 0,9 0,8 .BET-BK, '000 0,7

Romania

1,8 1,7 1,6 1,5 1,4 1,3 1,2 1,1 Total Market Cap. 1,0 0,9 (27/02/2018): 0,8 20.9% of GDP 0,7

Serbia Bulgaria (SOFIX)

1,4

1,7

Cyprus (CSE GI)

1,4

Egypt (HERMES)

1,1

1,1

F.Y.R.O.M (MBI-10)

0,8

0,8

Romania (BET-BK)

0,5

0,5

1,2 1,0

0,8

0,8

0,6

0,6

0,4

0,4 .SOFIX, '000

0,2

0,2

FYROM Stock Exchange (MBI100, '000)

2,0

Total Market Cap. (26/02/2018): 11.6% of GDP


1,0

Equity Indices (Feb. 26th 2018)

2,0

1,7

Bulgaria 1,2

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18


120 110 100 90 80 70 60 50 40 30 20

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

Turkey(.XU100, '000) Stock Exchange 120 110 100 90 80 70 60 50 40 30 20

6

6

5

5

4

2

Serbia (BELEX 15) Turkey (ISE-100)

0

20

YTD change (%)

Albania

N.A.

10

30

40

50

60

70

80

90

100

Y-o-Y change (%)

Cyprus Stock Exchange (.CYMNPRL, '000)

2

MBI10, '000

1

Egypt Stock Exchange (.HRMS, '000)

3,5

3,5

1,6

3,0

3,0

1,4

2,5

2,5

1,2

2,0

1,0

1,5

0,8

0,8

1,0

0,6

0,6

0,5

0,4

0,0

0,2

2,0 1,5


1,0 0,5

.CYMNPRL, '000


1,6 1,4 1,2 1,0

0,4 .HRMS, '000

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

0,0


3

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

1

0,2

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

0,2

3


0,2

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

.BELEX15, '000

4 Total Market Cap. (26/02/2018): 21.3% of GDP

37

Total loans (m-o-m % change, 3-month moving average) Lending was buoyant in Turkey in 2017, underpinned by the Government’s Credit Guarantee Fund (targeting SMEs) and, to a lesser extent, the relaxation of restrictive measures Romania Total Loans (m-o-m % change, 3-m m.a.)

Bulgaria Total Loans (m-o-m % change, 3-m m.a.) 4

3

3

3

3

2

2

2

2

1

1

1

1

0

0

0

0

-1

-1

-1

-1

-2

-2

-2

-2

Non-Adj. for FX fluctuations

Adj. for FX fluctuations

Serbia Total Loans (m-o-m % change, 3-m m.-a.) 6

6

5

5

4

4

3

3

2

2

1

1

0

All banks, excl. CCB from November 2014 (BNB definition) All banks, excl. CCB from beginning of time series (NBG estimates)


FYROM Total Loans (m-o-m % change, 3-m m.-a.)

Total Loans (m-o-m% change, 3-m m.a., January 2018)

0

-0,5

-0,5

-1

-1

-1,0

-1,0

-2

-2

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18 Non-Adj. for FX fluctuations

* December 2017

Albania Total Loans (m-o-m % change, 3-m m.-a.)

Turkey

0,0

FYROM

0,0

Egypt**

0,5

Serbia*

0,5

Bulgaria

1,0

Romania

1,0

Albania*

1,5

Cyprus*

1,5


3

3

3

2

2

2

1

1 0

1

1

0

0

-1

-1

-2

-2

-3

-3



06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

-1


2

2

1

1

0

0

-1

-1

Egypt

3

-1

3

Cyprus% change, 3-m m.-a.) Total Loans (m-o-m 4

0

3

** October 2017

4

2

4 3 2 1 0 -1 -2 -3 -4

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18


4 3 2 1 0 -1 -2 -3 -4 06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

4

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

4


10

Total Loans (m-o-m % change, 3-m m.-a.)

10

8

8

6

6

4

4

2

2

0

0

-2

-2 06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

Turkey Total Loans (m-o-m % change, 3-m m.-a.)

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

4



38

Total loans (y-o-y % change) Turkey and Egypt continue to post double-digit lending growth Romania Total Loans (y-o-y % change) 70

60

60

50

50

40

40

30

30

20

20

10

10

0

0


Total LoansSerbia (y-o-y % change)

30

20

20

10

10

0

0

* December 2017

Egypt**

Turkey

Romania

FYROM

Bulgaria

Serbia*

-10

Cyprus*

-10

45 40 35 30 25 20 15 10 5 0 -5

** October 2017

Cyprus Total Loans (y-o-y % change)



Total LoansEgypt (y-o-y % change)

40

40

30

30

20

20

10

10

0

0

-10

-10

-20

-20

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

50 45 40 35 30 25 20 15 10 5 0 -5

45 40 35 30 25 20 15 10 5 0 -5

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

30

Albania Total Loans (y-o-y % change)


FYROM Total Loans (y-o-y % change) 40


50 45 40 35 30 25 20 15 10 5 0 -5

All banks, excl. CCB from beginning of time series (NBG estimates)

40

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18 Adj. for FX fluctuations

All banks, excl. CCB from November 2014 (BNB definition)


Total Loans (y-o-y % change, January 2018)

40 35 30 25 20 15 10 5 0 -5 -10

60 50 40 30 20 10 0 -10 -20 06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

-10


40 35 30 25 20 15 10 5 0 -5 -10

60 50 40 30 20 10 0 -10 -20

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

-10

Albania*


Bulgaria Total Loans (y-o-y % change)

70

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

45 40 35 30 25 20 15 10 5 0 -5


50 45 40 35 30 25 20 15 10 5 0 -5

50 45 40 35 30 25 20 15 10 5 0 -5 06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

Total LoansTurkey (y-o-y % change) 45 40 35 30 25 20 15 10 5 0 -5



39

Retail loans (y-o-y % change) The retail segment remains strong in all the countries under review, with the exception of Cyprus

40

35

35

30

30

25

25

20

20

15

15

10

10

5

0

0

-5

-5

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

5

80 70 60 50 40 30 20 10 0 -10


Retail LoansSerbia (y-o-y % change)

35

35

25

25

15

15

5

5

-5

-5

40

30

30

20

20

10

10

0

0

-10

FYROM Retail Loans (y-o-y % change)

20

20

15

15

10

10

60

60

50

50

40

40

30

30

5

5

0

0

-5

-5

20

20

-10

10

10

0

0

* December 2017

Albania Retail Loans (y-o-y % change)

Egypt**

Turkey

FYROM

Romania

Serbia*

Bulgaria

Albania*

Cyprus*


** October 2017

Cyprus Retail Loans (y-o-y % change)

Egypt Retail Loans (y-o-y % change)

60

25

25

50

50

20

20

40

40

15

15

30

30

10

10

20

20

5

5

10

10

0

0

-5

-5

-10

-10



06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

0 -10

-10


60


40


-10

-10

50

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

45

0

60

50

Retail Loans (y-o-y % change, January 2018)

45


Bulgaria Retail Loans (y-o-y % change) 60


40 35 30 25 20 15 10 5 0 -5

40 35 30 25 20 15 10 5 0 -5 06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

40

Romania Retail Loans (y-o-y % change)

80 70 60 50 40 30 20 10 0 -10

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

45

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

Retail LoansTurkey (y-o-y % change) 45



40

Corporate loans (y-o-y % change) Corporate lending remains the main driver of lending activity in Turkey and Egypt

60

60

40

40

50

50

40

40

30

30

20

20

10

10

0

0

30

20

20

10

10

0 -10

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

-10

-10


-10



Serbia Corporate Loans (y-o-y % change) 40

30

FYROM Corporate Loans (y-o-y % change)

50

50

30

40

40

20

20

30

30

10

10

20

20

10

10

0

0

-10

-10

-20

-20

0

0


* December 2017

Albania Corporate Loans (y-o-y % change)

Egypt**

Turkey

Romania

FYROM

Bulgaria

Serbia*

Albania*


-10

Cyprus*

-10

Corporate Cyprus Loans (y-o-y % change) 50

50

40

40

40

40

30

30

30

30

20

20

20

20

10

10

0

0

10 0

-10

-10

-20

-20




06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

-10

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

-10

40 35 30 25 20 15 10 5 0 -5 -10

Egypt(y-o-y % change) Corporate Loans

50

0

40 35 30 25 20 15 10 5 0 -5 -10

** October 2017

50

10

60 50 40 30 20 10 0 -10 -20



Corporate Loans (y-o-y % change, January 2018)

40

Bulgaria Corporate Loans (y-o-y % change)

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

0

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

30

60 50 40 30 20 10 0 -10 -20

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

CorporateRomania Loans (y-o-y % change) 50


60 55 50 45 40 35 30 25 20 15 10 5 0 -5

60 55 50 45 40 35 30 25 20 15 10 5 0 -5 06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

Turkey Corporate Loans (y-o-y % change) 50



41

Total deposits (m-o-m % change, 3-month moving average) Deposit growth gathers momentum in most of the economies under review

3

3

2

2

Total DepositsRomania (m-o-m % change, 3-m m.a.)

4 3

Bulgaria Total Deposits (m-o-m % change, 3-m m.a.) 4

3

3

3

2

2

1

1

0

0

-1

-1

0

-2

-2

-3

-3

2

2

1 1

1

0

0

-1

-1

-1

-1

-2

-2

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

1



Serbia Total Deposits (m-o-m % change, 3-m m.-a.)

-1

-2

-2

-3

-3

-4

-4

-5

-5

2

2

1,0

1,0

1

1

0,5

0,5

0

0

0,0

0,0

-1

-1

-2

-2



* December 2017

Albania Total Deposits (m-o-m % change, 3-m m.-a.)

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

0

1,5

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

0 -1

1,5

Egypt**

1

Romania

2

1

3

FYROM

2

3

Serbia*

3

FYROM Total Deposits (m-o-m % change, 3-m m.-a.) 2,0

Turkey

3


Total Deposits (m-o-m% change, 3-m m.a., January 2018)

2,0

Bulgaria

4

Albania*

4

Cyprus*


All banks, excl. all CCB's in Nov.14' & incl. CCBs' guarant. deposits in Dec.14' (BNB def.) All banks, excl. CCBs' non-guarant. deposits from beg. of time series (NBG est.)

** October 2017

Total DepositsCyprus (m-o-m % change, 3-m m.-a.)

Egypt Total Deposits (m-o-m % change, 3-m m.-a.)

4

4

2

2

2

2

1

1

0

0

0

0

-2

-2

-1

-1

-4

-4

-2

-2

-6

-6

-3

-3

-8

-8




06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

3

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

3


9 8 7 6 5 4 3 2 1 0 -1

9 8 7 6 5 4 3 2 1 0 -1

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

4

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

Turkey% change, 3-m m.-a.) Total Deposits (m-o-m 4



42

Total deposits (y-o-y % change) Deposit growth surpasses lending growth in all countries under review, with the exception of Turkey Romania Total Deposits (y-o-y % change) 25

20

20

15

15

10

10 5

0

0

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

5



Serbia Total Deposits (y-o-y % change)

25

40

40

20

20

30

30

15

15

20

20

10

10

10

10

5

5

0

0

-5

-5

0

* December 2017

Egypt**

Turkey

Bulgaria

FYROM

Serbia*

Cyprus*

-10

Albania*

-10

** October 2017

Cyprus Total Deposits (y-o-y % change) 25

20

20

15

15

10

10

5

5

0

0

-5

-5

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

-10


0

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

25

Albania Total Deposits (y-o-y % change)

-10

Total Deposits (y-o-y % change) FYROM 50


25



30 25 20 15 10 5 0 -5

50

Romania



Total Deposits (y-o-y % change, January 2018)

40 35 30 25 20 15 10 5 0 -5 -10

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

40 35 30 25 20 15 10 5 0 -5 -10

30 25 20 15 10 5 0 -5

All banks, excl. all CCB's in Nov.14' & incl. CCBs' guarant. deposits in Dec.14' (BNB def.) All banks, excl. CCBs' non-guarant. deposits from beg. of time series (NBG est.)

Egypt Total Deposits (y-o-y % change)

30

30

50

20

20

40

40

10

10

30

30

0

0 20

20

10

10

0

0

-10

-10

-20

-20

-30

-30

-40

-40 06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18


45 40 35 30 25 20 15 10 5 0


50

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

25

Bulgaria Total Deposits (y-o-y % change)

45 40 35 30 25 20 15 10 5 0

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

30

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

Turkey Total Deposits (y-o-y % change) 30



43

Retail deposits (y-o-y % change) The retail segment is the main driver of deposit growth in Egypt

25

20

20

15

15

10

10 5 0

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

0




Serbia Retail Deposits (y-o-y % change)

60

40

40

50

50

40

40

30

30

30

20

20

20

10

10

10

10

0

0

15

10

10

5

5

0

0

-5

-5

-10

-10

** October 2017

20

20

30

15

15

20

10

10

5

5

0

0

-5

-5

Egypt**

Turkey

Romania

Bulgaria

FYROM

Cyprus*

Serbia*

* December 2017

Albania Retail Deposits (y-o-y % change)

25

-10

Albania*


Cyprus: Residents' deposits

Cyprus(y-o-y % change) Resident Deposits Residents’ deposits

Egypt Retail Deposits (y-o-y % change) 30

50

50

20

20

40

40

10

10

30

30

0

0

20

20

10

10

0

0

25

25

30

20

20

15

15

10

10 5

0

0

-10

-10

-5

-5

-20

-20

-30

-30

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

-10



06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

5


20

15

25

0

-10

-10

-10

20

FYROM Retail Deposits (y-o-y % change)

60


25

Retail Deposits (y-o-y % change, January 2018)

50

-10

30

25


50

0

Bulgaria Retail Deposits (y-o-y % change) 30

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

5

50 45 40 35 30 25 20 15 10 5 0

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

25

Romania Retail Deposits (y-o-y % change)

50 45 40 35 30 25 20 15 10 5 0


06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

30

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

Turkey Retail Deposits (y-o-y % change) 30



44

Corporate deposits (y-o-y % change) The corporate segment is growing at a faster pace than the retail segment in all the countries under review, with the exception of Egypt Romania(y-o-y % change) Corporate Deposits

10 0

-10




Serbia Corporate Deposits (y-o-y % change) 40

40

30

30

20

20

10

10 0

-20

-20


40

30

30

20

20

10

10

0

0

-10

-10

-20

-20 -30

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

-30




10

10

0

0

10

0 -10

Albania Corporate Deposits (y-o-y % change) 40

20

10

* December 2017

50

20

20


50

30

20

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

-10

30

50 40 30 20 10 0 -10 -20 -30 -40 -50 -60

0

-10

-10

-10

-20

-20

-30

-30

** October 2017 Cyprus: Non-Residents' deposits

Non ResidentCyprus Deposits (y-o-y % change) Non-Residents’ deposits

Egypt(y-o-y % change) Corporate Deposits 50 40 30 20 10 0 -10 -20 -30 -40 -50 -60

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

0 -10

30

FYROM Corporate Deposits (y-o-y % change)

Corporate Deposits (y-o-y % change, January 2018)

30

FYROM

50

Cyprus*

50


Turkey

-10

Serbia*

0

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

10

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

20

25 20 15 10 5 0 -5 -10 -15 -20 -25


50

50

40

40

30

30

20

20

10

10

0

0

-10

-10

-20

-20

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

20

40 35 30 25 20 15 10 5 0 -5 -10

25 20 15 10 5 0 -5 -10 -15 -20 -25

Egypt**

30

Bulgaria

30

Bulgaria Corporate Deposits (y-o-y % change)

40 35 30 25 20 15 10 5 0 -5 -10

Romania

40

Albania*

Turkey Corporate Deposits (y-o-y % change)

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

40



45

Serbia (%) Loans/GDP 56 54 52 50 48 46 44 42 40 38 36 34

40 40

39 39

38 38

37 37

36 36

35 35

34 34

33 33

32 32

NBG – Economic Analysis Division – Emerging Markets Research 250 250

52 52

200 200

50 50

150 150

48 48

100 100

46 46

44 44

42 42

40 40

38 38

Albania(%) Loans/GDP * December 2017

70

42 42

65 65

40 40

60 60

38 38

55 55

36 36

50

34 34

45 45

32 32

40 40

30 30

35

28 28

30

26 26

50

0 0

** October 2017

320 310 300 290 280 270 260 250 240 230 220 320 310 300 290 280 270 260 250 240 230 220


06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

Cyprus*

Turkey

Bulgaria

FYROM

Serbia*

Albania*

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

Turkey (%) Loans/GDP

Loans/GDP (%, January 2018)

Cyprus (%) Loans/GDP

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

56 54 52 50 48 46 44 42 40 38 36 34

Romania

30

70

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

35

Egypt**

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

50

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

Total loans-to-GDP ratio (%) All the economies under review, with the exception of Cyprus, are underpenetrated in terms of lending Romania (%) Loans/GDP

72 70 68 66 64 62 60 58 56 54 52 50

Bulgaria (%) Loans/GDP 72 70 68 66 64 62 60 58 56 54 52 50

All banks, excl. CCB from beginning of time series (NBG estimates) All banks, excl. CCB from November 2014 (BNB definition)

FYROM

50

Egypt (%) Loans/GDP

42 40 38 36 34 32 30 28 26 24 42 40 38 36 34 32 30 28 26 24

46

70

36 36

65 65

34 34

60 60

32 32

55 55

30 30

50

28

50

26 26

45 45

24 24

40 40

22

35 35

76

70 70

68 68

66 66

Albania FX Loans/Total Loans (%)

NBG – Economic Analysis Division – Emerging Markets Research 70 70

60 60

50

40

30 n.a.

20

* December 2017

74 74

37 37

70 70

34 34

66 66

31 31

62 62

28 28

58 58

54 54

25 25

50 50

22 22

N.A.


06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

70

** October 2017

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

72

Cyprus*

72

Serbia*

74

Albania*

74

FYROM

SerbiaLoans (%) FX Loans/Total

Romania

76

Bulgaria

22

Turkey

28

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18 38

Turkey FX Loans/Total Loans (%)

Egypt**

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

38

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

FX loans-to-total loans ratio (%) The proportion of FX lending in total lending is decreasing; yet it remains high Romania FX Loans/Total Loans (%) 68 64 60 56 52 48 44 40 36

Bulgaria FX Loans/Total Loans (%)

FX Loans/Total Loans (%, January 2018)

Cyprus

68 64 60 56 52 48 44 40 36


58

FYROM 58

55 55

50

52 52

40

49 49

30

46 46

20

43 43

40 40

Egypt Loans (%) FX Loans/Total

47

Total deposits-to-GDP ratio (%) The upward trend in the deposit-to-GDP ratio has reversed in Albania (due to attractive domestic debt yields) Romania (%) Deposits/GDP 36

36

54

52

52

50

50

48

48

46

46

44

44

42

42

40

34

34

32

32

30

30 28

40

26

26

46

240

240

44

44

210

210

42

42

180

180

40

40

150

38

38

36

36

60

56

56

52

52

48

48

44

44

All banks, excl. CCBs' non-guarant. deposits from beg. of time series (NBG est.) All banks, excl. all CCB's in Nov.14' & incl. CCBs' guarant. deposits in Dec.14' (BNB def.)

FYROM (%) Deposits/GDP 52

150

50

50

120

48

48

90

90

46

46

60

60

44

44

30

30

42

42

0

40

40

38

38

120

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

28

* December 2017

Albania (%) Deposits/GDP

Cyprus*

30

Egypt**

0

Bulgaria

32

54

Albania*

32

28

64

60

52

Turkey

34

30

68

54

FYROM

34

** October 2017

Cyprus Deposits/GDP (%)

70

70

68

68

66

66

64

64

62

62

60

60

58

Egypt (%) Deposits/GDP

320

320

300

300

280

280

58

260

260

56

56

240

240

54

54

52

52

220

220

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

340

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

340


72

64

Deposits/GDP (%, January 2018)

Serbia*

Serbia (%) Deposits/GDP

Romania

46

Bulgaria (%) Deposits/GDP

68

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

28

72

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

54

56


75

75

70

70

65

65

60

60

55

55

50

50

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

Deposits/GDP (%)

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

Turkey

56

48

FX deposits-to-total deposits ratio (%) The proportion of FX deposits in total deposits is at similar levels to that for loans Turkey

Romania Deposits (%) FX Deposits/Total 46 44 42 40 38 36 34 32 30 28

82

SerbiaDeposits (%) FX Deposits/Total

40

40

38

38

36

36

34

34

32

32 30

80

80

80

70

70

78

78

60

60

50

50

76

76

40

40

74

74

30

30

20

20

10

* December 2017

Albania FX Deposits/Total Deposits (%)

0

Cyprus*

Serbia*

Albania*

Turkey

FYROM

Bulgaria

68

Romania

68

10 n.a.

0

Egypt**

70

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

70

52

50

50

48

48

46

46

44

44

42

42

40

40

38

38

FX Deposits/Total FYROMDeposits (%)

80

72

54

52

FX Deposits/Total Deposits (%, January 2018)

82

72

BulgariaDeposits (%) FX Deposits/Total

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

30

54

58 56 54 52 50 48 46 44 42 40

58 56 54 52 50 48 46 44 42 40

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

FX Deposits/Total Deposits (%)

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

46 44 42 40 38 36 34 32 30 28

** October 2017

Cyprus

Egypt Deposits (%) FX Deposits/Total

54

54

32

32

52

52

30

30

50

50

28

28

26

26

24

24

22

22

48

48

N.A.

46

46

44

44

20

20

42

18

18

16

16

42

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

40

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

40



49

Total loans-to-total deposits ratio (%) Liquidity pressures intensified only in Turkey in 2017 Turkey (%) Loans/Deposits

Romania Loans/Deposits (%) 150

150

150

150

140

140

140

140

130

130

130

130

120

120

120

120

110

110

110

100

100

110 All banks, excluding CCB loans November 2014, on the one 100 from hand, and excluding all CCB's

150

140

140

120

120

100

100

90

90

80

80

80

70

70

70

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18 20

Albania (%) Loans/Deposits

110

110

105

105

100

100

95

95

90

90

** October 2017

Cyprus Loans/Deposits (%)

66

66

62

62

58

58

54

54

50

50

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

70


70

0

* December 2017

70

80

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

0

Turkey

100

20

Serbia*

100

40

Cyprus*

110

60

40

FYROM

110

60

Romania

120

Bulgaria

120

Albania*

130

80

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

130

80

Egypt**

140

90

FYROM (%) Loans/Deposits

Loans/Deposits (%, January 2018)

160 150 140 130 120 110 100 90 80 70

Egypt Loans/Deposits (%) 160 150 140 130 120 110 100 90 80 70

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

140

100

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

90

deposits in November 2014 and including CCB's guaranteed deposits in December 2014, on the other hand (BNB definition)


60

60

56

56

52

52

48

48

44

44

40

40

36

36

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

Serbia (%) Loans/Deposits 150

Bulgaria (%) Loans/Deposits

125 120 115 110 105 100 95 90 85 80 75 70

06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18

125 120 115 110 105 100 95 90 85 80 75 70

50

12

9 2011 ROAE excluding Agrobanka = 6% H2:12 ROAE excluding Development Bank of Vojvodina = 6.2% 2012 ROAE excluding Nova Agrobanka = 4.7% 2013 ROAE excluding Privredna Banka = -0.1% 2014 ROAE excluding Srpska Banka = 3.3%

22

10 18

15

12

9

6 6

3 3

0 0

22

18 18

14 14

10

6 6

2 2

-2 -2


Serbia

18 15 12 9 6 3 0 -3 -6 -9 -12 -15

Albania 40

20

0

-20

-40

6M:07 12M:07 6M:08 12M:08 6M:09 12M:09 6M:10 12M:10 6M:11 12M:11 6M:12 12M:12 6M:13 12M:13 6M:14 12M:14 6M:15 12M:15 6M:16 12M:16 6M:17 12M:17 6M:18 12M:18

20

16 16

12 12

ROAE (%, 2017)

n.a.

18 15 12 9 6 3 0 -3 -6 -9 -12 -15

*: 9M:17, annualised



16 16

4 4 12 12

0 0

-4 -4

-8

-12

0

20

Romania

Cyprus annualised, %) ROAE (cumulative,

-80

5 5

-100 -100

0 0

-120 -120

12M:06/07 6M:07/08 12M:07/08 6M:08/09 12M:08/09 6M:09/10 12M:09/10 6M:10/11 12M:10/11 6M:11/12 12M:11/12 6M:12/13 12M:12/13 6M:13/14 12M:13/14 6M:14/15 12M:14/15 6M:15/16 12M:15/16 6M:16/17 12M:16/17 6M:17/18 12M:17/18

8

15

0

Egypt

8

15

5

Turkey

20

5

Albania

20

10

Romania

ROAE (cumulative, Turkeyannualised, %)

FYROM*

15

25

Serbia*

10



25

Bulgaria

18

30

Cyprus*


30



Return-to-average equity ratio (%, cumulative and annualised) Double-digit return-to-average equity ratio in 2017 in almost all the countries under review

24

Bulgaria 24

20 20

8 8

-8 4 4

-12 0 0

20

FYROMannualised, %) ROAE (cumulative, 20

16 16

12 12

8 8

4 4

0 0

-4 -4

40

35

Egypt ROAE (cumulative, annualised, %)

20

30

0

25 25

-20

20 20

-40

15 15

-60 -60

10 10

-80

35

N/A

30

51

30 30

25 25

20 20

15 15

10 10

5 5

0 0

21 21

18 18

15 15

12 12

0


Serbia

Albania Q2:07 Q4:07 Q2:08 Q4:08 Q2:09 Q4:09 Q2:10 Q4:10 Q2:11 Q4:11 Q2:12 Q4:12 Q2:13 Q4:13 Q2:14 Q4:14 Q2:15 Q4:15 Q2:16 Q4:16 Q2:17 Q4:17 Q2:18 Q4:18

18

21 24

18 21 21

15 15 18 18

12 12 15 15

12 12

Romania

9

8

6 6

4 4

3 3

0 0

24 24

21 21

18 18

15 15

12

9 12

9

6 6

3 3

0 0

*: September 2017

9 9 9 9

6 6 6 6

3 3 3 3

0 0

0



24

0

CAD Ratio (%, 2017)

Cyprus CAD Ratio (%)


8

0

Serbia*

0

Bulgaria*

12

Romania

16

Turkey

12

21

Albania

16

Cyprus*

20

FYROM*

20



Turkey CAD Ratio (%)

Egypt*


24



Capital adequacy ratio (%) Capital base remained sound in 2017 in all the banking sectors under review Bulgaria

3 New EU Reporting Standards

24

9 9

6 6

3

0

FYROM CAD Ratio (%)

20 20

16 16

12 12

8 8

4 4

0 0

18 18

18 CAD Egypt Ratio (%)

18

15 15

15 15

12 12

12 9

12

9

6 6

3 3

0 0

52

1 1

0 0

24

Serbia 24

20 20

16 16

12 12

8 8

4 4

0 0

Albania

25 25

20 20

15 15

10 10

5

0

*: including substandard and doubtful loans and losses 5

0


8 8

6 6

Loan Loss Ratio (standard, watch, substandard, doubtful and loss with over 90, 60, 30, 15 and 0 dpd, respectively) NPL Ratio (sample banks using the standard approach in credit risk assessment) NPL Ratio (all banks using the standard approach in credit risk assessment) NPL Ratio (EBA definition, exposures more than 90 dpd or unlikely to be collected without use of the collateral regardless of the dpd)

4 4

2 2

0 0

45 40 35 30 25 20 15 10 5 0 45 40 35 30 25 20 15 10 5 0

50 50

45 45

40 40

35 35

30 30

25 25

20 20

15 15

10 10

0

*: EBA definition since Q4:14 5

0



30 25 20 15 10 5 0

*: September 2017


2

Romania 20

NPL Ratio (%, 2017)

Cyprus NPL Ratio (%)


2

Cyprus*

3

Albania

3

Bulgaria

4

Serbia*

4

30 25 20 15 10 5 0

FYROM*

5

Romania

5

Egypt*

6



NPLTurkey Ratio (%)

Turkey


6



Non-performing loans ratio (%) NPL ratios are on a downward trend, supported by large write-offs and sales of bad loans to non-financial companies Bulgaria

18

20

18

16 16

14 14

12 12

10 10

15

FYROM NPL Ratio (%) 15

12 12

9 9

6 6

3 3

0 0

15

Egypt NPL Ratio (%) 15

12 12

9 9

6 6

3 3

0 0

53

Banking sector – Foreign ownership A strong foreign presence in Albania, Romania, Bulgaria, Serbia and FYROM

Foreign Ownership (% of Total Assets, 2017) Turkey a

Romania

Bulgaria

Serbia a

FYROM

Albania b

Cyprus c

Egypt d

b

25.7

77.0

76.6

75.8

69.9

82.6

21.0

55.0

a:

30.09.2017

b:

31.12.2016

c:

30.06.2016

d:

31.12.2015



54