CONSENSUS FORECAST - FocusEconomics...April 2015 Summary REAL SECTOR | Ukraine’s crisis and...

CONSENSUS FORECAST

SUMMARY 3CALENDAR 15BULGARIA 17CROATIA 23CZECH REP. 29ESTONIA 44HUNGARY 50LATVIA 65LITHUANIA 71POLAND 77ROMANIA 92RUSSIA 101SLOVAKIA 119SLOVENIA 125TURKEY 131UKRAINE 147NOTES 164

Contributors

PUBLICATION DATE 14 April 2015FORECASTS COLLECTED 7 April - 13 April 2015

INFORMATION AVAILABLE Up to and including 13 April 2015 NEXT EDITION 12 May 2015

Eastern Europe • April 2015

ARNE POHLMAN Chief EconomistARMANDO CICCARELLI Head of ResearchRICARDO ACEVES Senior EconomistRICARD TORNÉ Senior EconomistOLGA COSCODAN Economist

CARL KELLY EconomistTERESA KERSTING EconomistDIRINA MANÇELLARI EconomistANGELA BOUZANIS EconomistCECILIA SIMKIEVICH Economist

ROBERT HILL Economist ERIC DENIS Economist MIRIAM DOWD Editor

FOCUSECONOMICS Summary

FocusEconomics Consensus Forecast | 2

April 2015

Forecast Summary | Major Economies and Eastern Europe

Gross Domestic Product, ann. var. in % Consumer Prices, ann. var. in %

2012 2013 2014 2015 2016 2012 2013 2014 2015 2016World -4.2 -3.3 -2.9 -2.9 -2.6 0.0 0.0 0.0 0.0 0.0United States -6.7 -4.1 -2.8 -2.6 -2.7 -2.9 -2.4 -2.4 -2.3 -2.5Euro area -3.6 -2.9 -2.6 -2.3 -2.0 1.7 2.0 2.2 2.7 2.6Japan -9.0 -9.1 -8.3 -6.9 -6.5 1.0 0.7 0.5 2.1 2.1China -1.6 -1.9 -1.8 -2.4 -2.5 2.5 1.9 2.1 2.6 2.3Eastern Europe -1.6 -1.7 -1.6 -2.7 -2.1 -0.4 -1.0 0.2 0.4 0.1Russia 0.0 -0.7 -0.6 -3.1 -2.1 3.5 1.5 2.9 3.9 3.6Turkey -2.1 -1.2 -1.3 -1.7 -1.7 -6.2 -7.9 -5.7 -4.7 -5.1Ukraine -3.6 -4.3 -4.6 -6.4 -4.9 -8.2 -9.2 -4.1 -1.8 -2.1EU Members -3.4 -3.3 -2.8 -2.6 -2.3 -2.0 0.1 0.1 0.1 -0.3Baltics -1.8 -1.6 -1.2 -1.1 -0.9 -2.1 -0.3 -1.2 -1.3 -1.7Croatia -5.6 -5.2 -5.2 -5.2 -4.7 -0.2 0.9 0.7 0.9 0.9Estonia -0.3 -0.5 -0.2 -0.5 -0.4 -2.5 -1.1 -0.1 -1.3 -1.6Latvia -0.8 -0.9 -1.3 -1.2 -1.1 -3.3 -2.3 -3.1 -2.4 -2.8Lithuania -3.2 -2.6 -1.7 -1.5 -1.0 -1.2 1.6 -0.5 -0.5 -1.1Bulgaria -0.8 -1.5 -3.8 -3.1 -2.6 -1.2 1.0 0.0 0.3 -0.1Czech Republic -4.0 -1.3 -1.8 -2.2 -1.9 -1.6 -0.5 0.6 0.1 -0.1Hungary -2.3 -2.4 -2.7 -2.6 -2.5 1.8 4.0 4.1 4.2 3.9Poland -3.7 -4.0 -3.4 -2.8 -2.5 -3.5 -1.3 -1.4 -1.3 -1.6Romania -3.0 -2.2 -2.0 -2.1 -2.0 -4.6 -0.8 -0.4 -0.9 -1.3Slovakia -4.2 -2.6 -3.0 -2.7 -2.2 2.2 2.1 2.1 2.7 2.3Slovenia -3.7 -14.6 -4.8 -3.6 -3.0 2.7 5.6 5.8 5.3 4.9

Fiscal Balance, % of GDP Current Account, % of GDP

2012 2013 2014 2015 2016 2012 2013 2014 2015 2016World 2.5 2.6 2.7 3.1 3.5 2.9 2.7 3.0 2.5 2.9United States 2.3 2.2 2.4 3.0 2.8 2.1 1.5 1.6 0.4 2.2Euro area -0.8 -0.4 0.9 1.3 1.7 2.5 1.4 0.4 0.0 1.2Japan 1.8 1.6 0.0 0.9 1.5 0.0 0.4 2.7 0.8 1.0China 7.7 7.7 7.4 7.0 6.8 2.6 2.6 2.0 1.7 2.1Eastern Europe 2.2 1.8 1.5 0.0 2.1 5.4 4.8 7.5 7.2 5.4Russia 3.4 1.3 0.6 -4.3 0.3 6.5 6.5 11.4 13.0 7.4Turkey 2.1 4.2 2.9 3.4 3.9 6.2 7.4 8.2 6.8 6.6Ukraine 0.2 0.0 -6.8 -5.8 1.9 -0.2 0.5 24.9 26.8 12.5EU Members 0.8 1.4 2.7 2.7 3.0 3.9 1.2 0.1 0.2 1.8Baltics 4.3 3.2 2.5 2.5 3.2 3.2 1.3 0.4 0.3 1.6Croatia -2.2 -0.9 -0.4 0.2 1.0 3.4 2.2 -0.2 0.2 1.4Estonia 4.7 1.6 2.1 2.0 2.7 4.2 3.2 0.5 0.5 1.9Latvia 4.8 4.2 2.4 2.5 3.3 2.3 0.0 0.7 0.5 1.8Lithuania 3.8 3.3 2.9 2.7 3.4 3.2 1.2 0.2 0.2 1.3Bulgaria 0.5 1.1 1.7 1.5 2.0 4.2 -1.6 -0.9 0.2 1.5Czech Republic -0.7 -0.7 2.0 2.4 2.7 3.3 1.4 0.4 0.4 1.7Hungary -1.5 1.5 3.6 2.7 2.4 5.7 1.7 -0.2 0.0 2.4Poland 1.9 1.7 3.3 3.3 3.5 3.7 0.9 0.0 -0.3 1.7Romania 0.6 3.4 2.8 2.9 3.1 5.0 1.6 0.8 1.7 2.2Slovakia 1.6 1.4 2.4 2.6 2.9 3.8 1.5 -0.1 0.2 1.6Slovenia -2.6 -1.0 2.6 2.0 2.1 2.8 1.9 0.4 0.3 1.3

Real GDP, annual variation in % Consumer Prices, variation in %

-2

0

2

4

6

8

World United States Euro area Japan China Eastern Europe

2013 2014 2015 2016

0

2

4

6

8

World United States Euro area Japan China Eastern Europe

2013 2014 2015 2016



April 2015

SummaryREAL SECTOR | Ukraine’s crisis and external factors in Russia drag on growth in Eastern EuropeMore complete data confirmed that the majority of the Eastern European economies continued to grow at a moderate pace in the last quarter of 2014. In the fourth quarter, regional GDP grew 1.1% year-on-year, which marked a deceleration compared to the 1.5% increase observed in the previous quarter. Although the majority of economies are expanding at a rate above the regional average—between 2% and 3% growth—Russia and war-hit Ukraine continue to weigh on the regional average. In Ukraine, recession deepened profoundly, with GDP growth hitting rock bottom in Q4. The Russian economy surprisingly eked out growth in the fourth quarter (+0.4% year-on-year), but more recent data signal that the economy reached the brink of recession at the outset of 2015.

The Ukrainian government and pro-Russian separatists signed a second ceasefire—known as Minsk II—in February. Although early signs were not encouraging, violence decreased gradually in March and both sides made progress in moving heavy weaponry away from the conflict zone. However, many observers and analysts are skeptical regarding whether long-term peace is achievable. In fact, fighting could flare up in the coming months, which would prevent the Ukrainian economy from recovering in 2015 despite the fact that the IMF extended Ukraine a lifeline when it approved a new USD 17.5 billion bailout package. Should the ceasefire hold, it is unlikely that the U.S. and the EU will impose tougher sanctions on Russia. Nonetheless, the existing sanctions are likely to continue for some time, which, along with low oil prices, prompted Moscow to revise the 2015 budget. The government now expects that the economy will contract and the fiscal deficit will widen this year.

OUTLOOK | Economic prospects hampered by unresolved crisis; regional growth is seen flatAnalysts participating in the FocusEconomics Consensus Forecast expect that growth in Eastern Europe will be zero this year. This month’s forecast was revised down from the 0.1% increase expected last month. If confirmed, this will represent the weakest economic performance in Eastern Europe since the global financial crisis hit the region in 2009. Eastern Europe’s growth prospects continued to be laden down by the unresolved crisis in Ukraine.

Regional outlook deteriorates

-2

0

2

4

Q1 12 Q1 13 Q1 14 Q1 15 Q1 16-2

0

2

4

Nov Feb May Aug Nov Feb

2015 2016

Eastern EuropeEconomic Growth Change in GDP forecasts

Note: GDP, real annual variation in %, Q1 2012 - Q4 2016.

Note: GDP, evolution of 2015 and 2016 forecasts during the last 18 months.

Change in GDP Growth Forecasts20162015

-1.0 -0.5 0.0 0.5

Ukraine

Turkey

Eastern Europe

Russia

Baltics

Czech Republic

Slovenia

Poland

Romania

Hungary

-0.2 -0.1 0.0 0.1

Russia

Eastern Europe

Turkey

Baltics

Poland

Czech Republic

Ukraine

Romania

Hungary

Slovenia

Note: Change between April 2015 and March 2015 in percentage points..

.Source: FocusEconomics Consensus Forecast.



April 2015

The slash in the 2015 regional growth forecast in April once again reflected another sizeable reduction to the GDP forecast for Ukraine and a cut to the GDP growth projections for Russia and Turkey. These countries account for the lion’s share of the regional forecast dropping into contractionary territory this month. Meanwhile, participants left growth projections unchanged for 9 of the 14 economies surveyed, while Bulgaria and Hungary were the only economies for which panelists raised their forecasts. The region is seen recovering gradually in 2016, with a projected GDP growth rate of 2.1%.

POLAND | Economy firms up in Q1; 2015 prospects remain stable as critical elections year progressesRecent indicators point to continued solid growth in the first months of 2015. Industrial activity accelerated in February and, despite some moderation, the manufacturing PMI remained firmly entrenched in expansionary territory in March. Meanwhile, the first round of presidential elections will take place on 10 May. Recent polls point to another mandate for the ruling Civic Platform (PO) party. Although President Komorowski’s approval ratings have deteriorated in recent months, he is still well ahead of Andrzej Duda, candidate for the opposition Law and Justice (PiS) party. The outcome of the parliamentary election slated for the last quarter of the year is more uncertain. Although polls suggest that opposition PiS could get the largest share of votes, it is very unlikely that the party will have enough seats to rule alone, and it is still not clear which parties would be willing to form a governing coalition led by PiS.

Poland’s economic prospects remain fairly bright. Private consumption will continue to support growth this year, underpinned by labor market improvements and real wage increases. Polish exports are also expected to benefit from a strengthened German economy, which has already shown signs of a pick-up due to the ECB’s quantitative easing program. Our panel of analysts expects the economy to expand 3.3% in 2015, which is unchanged from last month’s forecast. For 2016, the panel sees economic growth picking up to 3.5%. (see details on page 77)

RUSSIA | Q4 GDP shows resilience, but deteriorating conditions prompt government to revise 2015 budget The Russian economy eked out unexpected growth in the last quarter of 2014, demonstrating resilience in the face of geopolitical headwinds, international sanctions, a falling ruble and lower oil prices. However, the start of 2015 has brought signs of contraction as negative growth momentum has been picking up speed. In February, industrial production growth plummeted to a two-year low and exports decreased for the eighth time in the last nine months. In addition, the manufacturing and services PMIs continued to point to contraction in March and confidence among Russian consumers fell to the lowest level since 2009 in Q1. Owing to the economic deterioration and lower tax take from the hydrocarbons sector, the Finance Ministry presented new fiscal projections for this year, which foresee a fiscal deficit of 3.8% of GDP.

-6

-3

0

3

6

Q1 12 Q1 13 Q1 14 Q1 15 Q1 16-6

-3

0

3

6


2015 2016

RussiaEconomic Growth Change in GDP forecasts



0

1

2

3

4

Q1 12 Q1 13 Q1 14 Q1 15 Q1 163.0

3.2

3.4

3.6

3.8


2015 2016

PolandEconomic Growth Change in GDP forecasts





April 2015

Following lackluster economic growth in 2014, the Russian economy is expected to take a nosedive this year, driven by lower oil prices, international sanctions and geopolitical tensions. FocusEconomics panelists see the economy contracting 4.3% this year, which is down 0.1 percentage points from last month’s forecast. In 2016, the panel expects the economy to recover somewhat and grow a tepid 0.3%. (see details on page 101)

TURKEY | 2014 growth sluggish overall despite improvement in Q4Turkey’s economy lost steam last year, slowing from 2013’s 4.2% expansion to a 2.9% increase. The result was driven by sluggish private consumption and a contraction in fixed investment. More recent data for 2015 paint a mixed picture of the economy. The manufacturing PMI hit an almost-six-year low in March, yet industrial production rebounded to an expansion in February. On the political front, Turkey’s four major political parties presented their candidate lists to parliament on 7 April for the upcoming June general elections. The ruling Justice and Development party (AKP) has stated that their top electoral priority will be to switch from the current parliamentary system of government to a presidential system and they are hoping to win 367 of the 550 seats in order to change the constitution. President Recep Tayyip Erdogan has been advocating that the switch will promote political stability and more rapid decision making going forward, while critics argue that it will lead to a more authoritarian-style government.

Turkey’s outlook has moderated. While the fall in oil prices should help reduce the country’s current account deficit, growing uncertainty around the upcoming parliamentary elections and expectations that consumer spending will remain soft present a downside risk. FocusEconomics panelists lowered their growth projection for 2015 by 0.2 percentage this month and expect the economy to expand 3.4%. For 2016, the panel sees GDP expanding 3.9%. (see details on page 131)

UKRAINE | GDP contracts drastically in Q4 and economic crisis carries over into 2015; IMF comes to the rescueThe Ukrainian economy recorded the largest contraction in five years in 2014, falling by 6.8%. The drastic deterioration was driven by sharp declines in private consumption and fixed investment as a result of the military conflict between the government and pro-Russia rebels in the east of the country. More recent data indicate that Ukraine’s economic crisis has carried over into 2015. Industrial production plummeted in February, hitting an over five-year low, and inflation skyrocketed further in March. The conflict has pushed the country to the brink of bankruptcy and, on 11 March, the IMF extended Ukraine a lifeline by approving a new USD 17.5 billion bailout package. The agreement is part of an international effort to shore up Ukraine’s USD 40.0 billion financing gap for the next four years. The Ukrainian government has now entered into negotiations with debt holders in an effort to generate USD 15.3 billion through a debt restructuring program.

Ukraine’s prospects continue to deteriorate rapidly. Despite the IMF’s aid, the country’s financing woes are far from solved and

-18

-12

-6

0

6

Q1 12 Q1 13 Q1 14 Q1 15 Q1 16-6

-4

-2

0

2

4


2015 2016

UkraineEconomic Growth Change in GDP forecasts



0

2

4

6

Q1 12 Q1 13 Q1 14 Q1 15 Q1 163.0

3.5

4.0

4.5

5.0


2015 2016

TurkeyEconomic Growth Change in GDP forecasts





April 2015

private consumption is expected to continue to suffer on the back of strict austerity measures. Moreover, a large amount of political uncertainty remains and whether the February peace agreement will result in a lasting resolution to the military conflict is still unknown. Our panelists expect GDP to contract 5.8% in 2015, which is down 0.9 percentage points from last month’s forecast. The panel sees the country rebounding next year and projects that GDP will expand 1.9%. (see details on page 147)

INFLATION | Regional inflation continues upward trend driven by higher inflation in Russia, Ukraine and TurkeyRegional inflation jumped from a revised 7.9% in January (previously reported: 7.6% year-on-year) to 8.7% in February and is likely to continue rising in the coming months. Higher inflation in Russia, Turkey and Ukraine pushed up regional inflation, while deflationary pressures in almost all countries in the region partially mitigated the increase. While the ruble and the hryvnia have stabilized in recent days, both have lost over half of their value in annual terms, and this will continue having a negative impact on inflation.

Inflation expectations are still high; FocusEconomics panelists hiked their projections for the eighth consecutive month. This month’s increase was mainly the result of panelists raising the forecasts for Russia and Ukraine. In contrast, projections for the remaining economies surveyed declined further as they are in fact on the brink of deflation. Participants to the FocusEconomics Consensus Forecast expect regional inflation to end 2015 at 7.2%, which is up 0.4 percentage points from last month’s forecast. Forecasters participating in the FocusEconomics panel also raised their 2016 inflation forecasts from the 5.2% expected last month to the 5.4%.

Ricardo AcevesSenior Economist



April 2015

GDP Growth, 2015

Notes and sources

Note: Gross domestic product, real annual variation in %. Sources: National statistical institutes and central banks.

GDP per capita, 2015

Notes and sources

Note: GDP per capita in current EUR.Sources: National statistical institutes and central banks.

Gross Domestic Product, annual variation in %

GDP per capita, EUR

0 5,000 10,000 15,000 20,000

UkraineBulgaria

RomaniaRussia

Eastern EuropeTurkeyCroatia

HungaryEU Members

PolandLatvia

LithuaniaBaltics

SlovakiaEstonia

Czech RepublicSlovenia

-6 -4 -2 0 2 4

UkraineRussia

Eastern EuropeCroatia

BulgariaEstonia

SloveniaCzech Republic

BalticsLatvia

SlovakiaHungary

LithuaniaEU Members

RomaniaPolandTurkey

-6

-4

-2

0

2

4

6

East. Eur. Russia Turkey Poland Czech Rep. Romania Hungary

2013 2014 2015 2016

5,000

7,500

10,000

12,500

15,000

17,500


2013 2014 2015 2016

2013 2014 2015 2016 2017 2018 2019Bulgaria 1.1 1.7 1.5 2.0 2.6 2.8 2.8Croatia -0.9 -0.4 0.2 1.0 1.7 1.9 2.0Czech Republic -0.7 2.0 2.4 2.7 2.6 2.5 2.4Estonia 1.6 2.1 2.0 2.7 3.4 3.6 3.7Hungary 1.5 3.6 2.7 2.4 2.4 2.1 2.0Latvia 4.2 2.4 2.5 3.3 3.7 3.9 3.9Lithuania 3.3 2.9 2.7 3.4 3.7 3.9 4.0Poland 1.7 3.3 3.3 3.5 3.5 3.7 3.7Romania 3.4 2.8 2.9 3.1 3.2 3.2 3.3Russia 1.3 0.6 -4.3 0.3 1.6 2.1 2.2Slovakia 1.4 2.4 2.6 2.9 3.0 3.0 2.8Slovenia -1.0 2.6 2.0 2.1 2.2 2.4 2.4Turkey 4.2 2.9 3.4 3.9 4.1 4.2 4.2Ukraine 0.0 -6.8 -5.8 1.9 2.9 3.6 4.4

Eastern Europe 1.8 1.5 0.0 2.1 2.7 3.0 3.0EU Members 1.4 2.7 2.7 3.0 3.0 3.2 3.1Baltics 3.2 2.5 2.5 3.2 3.6 3.9 3.9

2013 2014 2015 2016 2017 2018 2019Bulgaria 5,671 5,833 5,916 6,116 6,421 6,780 7,171Croatia 10,278 10,044 10,048 10,268 10,596 11,031 11,491Czech Republic 14,893 14,664 15,071 15,836 17,148 17,574 18,660Estonia 14,196 14,648 15,022 15,714 16,640 17,662 18,802Hungary 10,223 10,489 10,805 11,245 11,744 12,289 12,845Latvia 11,373 11,835 12,233 12,897 13,705 14,630 15,622Lithuania 11,777 12,276 12,694 13,357 14,202 15,134 16,136Poland 10,281 10,692 11,187 11,925 12,770 13,742 14,866Romania 6,792 7,527 7,933 8,467 9,021 9,631 10,352Russia 10,883 9,736 8,313 9,501 10,214 10,697 11,590Slovakia 13,601 13,885 14,262 14,890 15,611 16,390 17,154Slovenia 17,552 18,065 18,456 19,038 19,738 20,614 21,575Turkey 8,195 7,837 9,002 9,847 10,246 10,660 11,152Ukraine 2,997 2,142 1,644 1,789 1,965 2,114 2,288

Eastern Europe 9,153 8,636 8,380 9,208 9,799 10,299 11,019EU Members 10,139 10,536 10,931 11,539 12,282 13,018 13,909Baltics 12,151 12,634 13,038 13,709 14,561 15,511 16,541



April 2015

Consumption Growth, 2015

Notes and sources

Note: Private consumption, real annual variation in %. In Hungary, total consumption.Sources: National statistical institutes and central banks.

Investment Growth, 2015

Notes and sources

Note: Gross fixed investment, real annual variation in %.Sources: National statistical institutes and central banks.

Consumption, annual variation in %

Investment, annual variation in %

2013 2014 2015 2016 2017 2018 2019Bulgaria -2.3 2.0 1.5 2.4 2.7 3.0 3.1Croatia -1.3 -0.7 0.1 0.8 1.6 1.8 2.2Czech Republic 0.4 1.7 2.2 2.3 2.5 2.7 2.8Estonia 3.8 4.6 3.5 3.5 3.8 4.0 4.1Hungary 0.9 1.8 2.8 2.4 2.3 2.1 1.8Latvia 6.2 2.3 3.2 3.6 3.8 4.0 4.1Lithuania 4.2 5.6 3.8 3.9 4.0 4.1 4.3Poland 1.1 3.1 3.2 3.4 3.4 3.6 3.6Romania 1.1 4.5 3.5 3.4 3.1 2.8 2.7Russia 5.0 1.3 -6.1 0.6 2.3 2.9 3.1Slovakia -0.8 2.2 2.6 2.6 2.5 2.5 2.5Slovenia -4.0 0.3 1.0 1.4 1.7 2.1 2.2Turkey 5.1 1.3 2.8 3.5 3.3 3.4 3.4Ukraine 6.9 -9.6 -7.6 1.7 2.9 3.7 4.5

Eastern Europe 3.8 1.4 -0.9 2.1 2.8 3.1 3.2EU Members 0.7 2.7 2.8 2.9 3.0 3.1 3.1Baltics 4.7 4.4 3.6 3.7 3.9 4.1 4.2

2013 2014 2015 2016 2017 2018 2019Bulgaria -0.1 2.8 2.9 4.6 5.1 5.3 5.4Croatia -1.0 -4.0 0.7 3.0 3.6 3.8 4.0Czech Republic -4.4 4.5 4.1 4.3 4.0 3.4 3.4Estonia 2.2 -2.8 1.5 3.9 5.2 5.3 5.6Hungary 5.2 11.7 2.9 1.5 3.4 3.2 3.0Latvia -5.2 1.3 2.0 4.4 5.4 5.6 6.1Lithuania 7.0 8.0 4.7 6.3 6.2 6.1 5.6Poland 1.7 9.5 6.2 5.5 5.0 5.0 4.9Romania -9.2 -3.3 3.7 4.5 4.4 3.9 3.9Russia 0.9 -2.0 -10.1 1.1 3.3 3.6 3.7Slovakia -2.7 5.7 3.5 4.2 3.8 3.5 3.1Slovenia 1.9 4.8 2.9 3.2 4.6 4.9 5.0Turkey 4.4 -1.3 2.6 4.5 4.6 4.5 4.4Ukraine -8.4 -23.0 -12.1 4.5 5.4 5.9 6.5

Eastern Europe 0.6 0.0 -2.0 3.1 4.1 4.1 4.2EU Members -0.8 5.6 4.4 4.5 4.5 4.4 4.3Baltics 2.2 3.4 3.1 5.2 5.7 5.8 5.7

-15 -10 -5 0 5 10

UkraineRussia

Eastern EuropeCroatiaEstonia

LatviaTurkey

SloveniaHungaryBulgaria

BalticsSlovakiaRomania

Czech RepublicEU Members

LithuaniaPoland

-12

-6

0

6

12


2013 2014 2015 2016

-9 -6 -3 0 3 6

UkraineRussia

Eastern EuropeCroatia

SloveniaBulgaria

Czech RepublicSlovakiaHungary

TurkeyEU Members

PolandLatvia

RomaniaEstoniaBaltics

Lithuania

-9

-6

-3

0

3

6


2013 2014 2015 2016



April 2015

Industrial Production Growth, 2015

Notes and sources

Note: Industrial production, real annual variation in %.Sources: National statistical institutes.

Retail Sales, 2015

Notes and sources

Note: Retail sales, real annual variation in %.Sources: National statistical institutes.

Industrial Production, annual variation in %

Retail Sales, annual variation in %

2013 2014 2015 2016 2017 2018 2019Bulgaria -0.1 1.7 3.0 4.0 4.3 4.6 4.6Croatia -1.9 1.3 1.4 2.5 3.0 3.2 3.2Czech Republic -0.1 4.9 4.4 5.0 4.3 4.2 4.1Estonia 4.1 2.4 3.4 3.8 4.3 4.4 4.7Hungary 1.5 7.2 5.1 5.5 4.5 4.3 4.2Latvia -0.4 -1.0 1.8 2.7 3.4 3.5 3.5Lithuania 3.8 0.1 2.3 3.5 4.0 3.9 3.8Poland 2.4 3.5 4.9 5.5 5.2 5.0 4.7Romania 7.9 6.2 5.3 5.7 4.8 4.4 4.1Russia 0.4 1.6 -2.1 1.1 2.2 2.3 2.4Slovakia 5.2 3.7 4.6 5.3 5.1 4.4 3.6Slovenia -1.1 1.5 2.6 2.8 3.5 3.6 3.6Turkey 3.5 3.5 3.7 4.6 4.6 4.5 4.4Ukraine -4.3 -10.1 -8.9 2.9 3.9 4.4 5.0


2013 2014 2015 2016 2017 2018 2019Bulgaria 2.9 4.2 4.1 4.6 4.7 4.9 5.3Croatia 1.7 -0.4 1.3 2.1 2.0 2.0 1.9Czech Republic 1.2 5.4 3.8 3.0 2.5 2.5 2.3Estonia 5.2 6.7 3.3 3.9 4.0 4.3 4.6Hungary 1.8 5.0 5.7 4.7 3.5 3.2 3.1Latvia 3.8 3.5 4.8 4.9 5.4 5.5 5.7Lithuania 4.3 5.7 - - - - -Poland 2.4 3.1 4.3 8.0 7.6 7.4 6.9Romania 0.5 6.4 2.8 3.1 2.9 2.9 2.8Russia 3.9 2.5 -5.1 2.1 2.9 3.2 3.2Slovakia 0.1 3.6 3.5 4.0 3.8 3.4 3.3Slovenia -3.7 0.0 - - - - -Turkey 4.1 3.9 - - - - -Ukraine 5.6 -9.6 - - - - -

Eastern Europe 3.3 2.9 -0.9 3.6 3.8 4.0 3.9EU Members 1.7 4.1 3.9 5.4 5.0 4.9 4.7

-6 -3 0 3 6

Russia

Eastern Europe

Romania

Latvia

Slovakia

Czech Republic

EU Members

Bulgaria

Poland

Hungary

-6

-3

0

3

6

9

East. Eur. Russia Poland Czech Rep. Romania Hungary

2013 2014 2015 2016

-10 -5 0 5 10

UkraineRussiaCroatia

Eastern EuropeLatvia

LithuaniaBaltics

SloveniaBulgariaEstoniaTurkey

EU MembersCzech Republic

SlovakiaPoland

HungaryRomania

-3

0

3

6

9


2013 2014 2015 2016



April 2015

Unemployment, 2015

Notes and sources

Note: End-of-year unemployment rate. In the Czech Republic, Hungary, Lithuania, Romania, Russia, Slovakia, Slovenia and Turkey, average rate.Sources: National statistical institutes and Eurostat.

Fiscal Balance, 2015

Notes and sources

Note: Fiscal balance in % of GDP. Forecasts for Poland reflect the pension reform law implemented in January 2014. Sources: National statistical institutes and finance ministries.

Unemployment, % of active population

Fiscal Balance, % of GDP

2013 2014 2015 2016 2017 2018 2019Bulgaria 11.8 10.7 10.9 10.3 9.9 9.4 9.1Croatia 21.6 19.6 19.5 18.7 18.0 17.0 16.6Czech Republic 7.7 7.7 7.0 6.7 6.3 6.2 6.2Estonia 8.6 7.3 6.8 6.3 5.9 5.9 5.9Hungary 10.1 7.7 7.2 6.9 6.6 6.4 6.4Latvia 11.9 10.9 10.0 9.2 8.4 7.7 7.4Lithuania 11.8 10.7 9.8 9.0 8.8 8.5 8.4Poland 13.4 11.5 10.9 10.3 10.1 9.5 9.3Romania 7.1 6.8 6.6 6.3 6.0 5.8 5.8Russia 5.5 5.2 6.5 6.4 6.0 5.7 5.5Slovakia 14.1 12.8 12.4 11.8 11.4 10.6 9.8Slovenia 10.1 9.7 9.2 8.7 8.5 8.5 8.2Turkey 9.1 10.0 10.1 9.9 9.6 9.0 8.9Ukraine 7.4 9.4 10.7 9.9 9.0 8.1 7.2


2013 2014 2015 2016 2017 2018 2019Bulgaria -1.5 -3.8 -3.1 -2.6 -1.8 -1.5 -1.5Croatia -5.2 -5.2 -5.2 -4.7 -3.6 -3.1 -2.9Czech Republic -1.3 -1.8 -2.2 -1.9 -1.8 -1.7 -1.6Estonia -0.5 -0.2 -0.5 -0.4 0.0 0.2 0.4Hungary -2.4 -2.7 -2.6 -2.5 -2.6 -2.6 -2.4Latvia -0.9 -1.3 -1.2 -1.1 -1.0 -0.9 -0.9Lithuania -2.6 -1.7 -1.5 -1.0 -1.0 -0.9 -0.7Poland -4.0 -3.4 -2.8 -2.5 -2.3 -1.7 -1.4Romania -2.2 -2.0 -2.1 -2.0 -1.9 -1.9 -1.7Russia -0.7 -0.6 -3.1 -2.1 -1.0 -1.0 -0.9Slovakia -2.6 -3.0 -2.7 -2.2 -1.9 -1.8 -1.1Slovenia -14.6 -4.8 -3.6 -3.0 -3.0 -2.7 -2.5Turkey -1.2 -1.3 -1.7 -1.7 -1.7 -1.6 -1.5Ukraine -4.3 -4.6 -6.4 -4.9 -3.9 -3.2 -2.5

Eastern Europe -1.7 -1.6 -2.7 -2.1 -1.6 -1.5 -1.3EU Members -3.3 -2.8 -2.6 -2.3 -2.1 -1.8 -1.6Baltics -1.6 -1.2 -1.1 -0.9 -0.8 -0.6 -0.5

-8 -6 -4 -2 0

UkraineCroatia

SloveniaRussia

BulgariaPoland

Eastern EuropeSlovakia

EU MembersHungary

Czech RepublicRomania

TurkeyLithuania

LatviaBaltics

Estonia

-5

-4

-3

-2

-1

0


2013 2014 2015 2016

5 10 15 20

RussiaRomania

EstoniaCzech Republic

HungaryEastern Europe

BalticsSlovenia

EU MembersLithuania

LatviaTurkey

UkrainePoland

BulgariaSlovakia

Croatia

5

7

9

11

13

15


2013 2014 2015 2016



April 2015

Inflation, 2015

Notes and sources

Note: End-of-year variation of consumer price index in %. In Hungary and Poland, annual average variation of consumer price index in %. In Estonia, Latvia, Lithuania, Slovakia and Slovenia data refer to annual average variation of harmonized index of consumer prices (HICP).Sources: National statistical institutes and central banks.

Interest Rate, 2015

Notes and sources

Note: Nominal end-of-year interest rates in %. Bulgaria: Base rate.Croatia: Central Bank discount rate.Czech Republic: Central Bank 2-week repo rate.Estonia: ECB refinancing rate. Hungary: Central Bank base rate.Latvia: ECB refinancing rate.Lithuania: ECB refinancing rate.Poland: Central Bank reference rate.Romania: Central Bank reference rate.Russia: Central Bank 1-week repo rate.Slovakia: ECB refinancing rate.Slovenia: ECB refinancing rate.Turkey: Central Bank 1-week repo rate.Ukraine: Central Bank discount rate.Sources: National central banks.

Inflation, variation of consumer prices in %

Interest Rate, %2013 2014 2015 2016 2017 2018 2019

Bulgaria 0.0 0.0 0.2 0.4 0.8 1.1 1.1Croatia 7.0 7.0 6.8 6.3 6.4 6.5 6.9Czech Republic 0.1 0.1 0.1 0.2 0.9 1.7 2.5Estonia 0.3 0.1 0.1 0.0 0.4 0.8 1.5Hungary 3.0 2.1 1.6 2.4 3.4 4.1 4.5Latvia 0.3 0.1 0.1 0.0 0.4 0.8 1.5Lithuania 0.3 0.1 0.1 0.0 0.4 0.8 1.5Poland 2.5 2.0 1.6 2.1 3.0 3.3 3.6Romania 4.0 2.8 2.0 2.5 3.5 3.8 4.0Russia 5.5 17.0 11.4 7.9 7.3 6.6 5.8Slovakia 0.3 0.1 0.1 0.0 0.4 0.8 1.5Slovenia 0.3 0.1 0.1 0.0 0.4 0.8 1.5Turkey 4.5 8.3 7.2 7.5 8.0 8.4 8.5Ukraine 6.5 14.0 21.0 14.7 12.5 10.7 8.9


2013 2014 2015 2016 2017 2018 2019Bulgaria -1.6 -0.9 0.2 1.5 2.1 2.5 2.5Croatia 2.2 -0.2 0.2 1.4 1.6 2.4 2.4Czech Republic 1.4 0.4 0.4 1.7 2.0 2.1 2.2Estonia 3.2 0.5 0.5 1.9 2.4 2.5 2.7Hungary 1.7 -0.2 0.0 2.4 2.7 2.7 2.8Latvia 0.0 0.7 0.5 1.8 2.3 2.5 2.5Lithuania 1.2 0.2 0.2 1.3 2.1 2.1 2.1Poland 0.9 0.0 -0.3 1.7 2.1 2.4 2.5Romania 1.6 0.8 1.7 2.2 2.4 2.5 2.5Russia 6.5 11.4 13.0 7.4 6.1 5.4 5.1Slovakia 1.5 -0.1 0.2 1.6 2.0 2.1 2.0Slovenia 1.9 0.4 0.3 1.3 1.7 2.2 2.4Turkey 7.4 8.2 6.8 6.6 6.0 5.9 5.7Ukraine 0.5 24.9 26.8 12.5 9.4 7.1 4.9


-5

0

5

10

15


2013 2014 2015 2016

-10 0 10 20 30

PolandHungary

LithuaniaBulgariaSlovakia

EU MembersCroatia

SloveniaBaltics

Czech RepublicEstonia

LatviaRomania

TurkeyEastern Europe

RussiaUkraine

0 5 10 15 20 25

Czech RepublicEstonia

SloveniaSlovakia

LatviaLithuania

BalticsBulgaria

EU MembersPoland

HungaryRomania

CroatiaEastern Europe

TurkeyRussia

Ukraine

0

5

10

15

20


2013 2014 2015 2016



April 2015

Exchange Rates vs. USD, 2015

Notes and sources

Note: Annual variation of national currencies versus USD in %. Positive number means currency is losing value against USD. Regional aggregates provided only as indicative information.Sources: Central banks and Thomson Reuters.

Current Account Balance, 2015

Notes and sources

Note: Current account balance as % of GDP. Sources: National statistical institutes and central banks.

Exchange Rates vs. USD, annual variation in %

Current Account Balance, % of GDP2013 2014 2015 2016 2017 2018 2019

Bulgaria 1.0 0.0 0.3 -0.1 -0.8 -1.0 -1.0Croatia 0.9 0.7 0.9 0.9 0.3 -0.3 -0.3Czech Republic -0.5 0.6 0.1 -0.1 -0.8 -0.9 -1.0Estonia -1.1 -0.1 -1.3 -1.6 -1.8 -1.8 -1.8Hungary 4.0 4.1 4.2 3.9 3.0 2.3 2.1Latvia -2.3 -3.1 -2.4 -2.8 -2.8 -2.9 -3.0Lithuania 1.6 -0.5 -0.5 -1.1 -1.7 -1.8 -1.9Poland -1.3 -1.4 -1.3 -1.6 -2.0 -2.0 -2.1Romania -0.8 -0.4 -0.9 -1.3 -2.4 -2.7 -2.9Russia 1.5 2.9 3.9 3.6 2.9 2.7 2.6Slovakia 2.1 2.1 2.7 2.3 2.2 2.2 2.2Slovenia 5.6 5.8 5.3 4.9 4.5 3.7 3.5Turkey -7.9 -5.7 -4.7 -5.1 -5.0 -4.8 -4.7Ukraine -9.2 -4.1 -1.8 -2.1 -2.7 -3.5 -4.2

Eastern Europe -1.0 0.2 0.4 0.1 -0.3 -0.4 -0.5EU Members 0.1 0.1 0.1 -0.3 -0.8 -1.0 -1.2Baltics -0.3 -1.2 -1.3 -1.7 -2.0 -2.1 -2.2

2013 2014 2015 2016 2017 2018 2019Bulgaria -4.4 13.3 17.2 -2.9 -5.2 -3.7 -2.7Croatia -3.1 14.2 17.0 -2.7 -5.1 -3.4 -2.5Czech Republic 4.4 14.8 16.4 -4.7 -5.3 -4.9 -4.6Estonia -4.5 12.2 14.2 -3.0 -5.5 -3.9 -2.8Hungary -2.0 20.9 14.4 -2.6 -4.5 -3.7 -1.7Latvia -4.5 12.2 14.2 -3.0 -5.5 -3.9 -2.8Lithuania -4.5 12.2 14.2 -3.0 -5.5 -3.9 -2.8Poland -2.4 17.3 11.7 -4.8 -6.0 -5.5 -4.5Romania -3.0 13.3 14.2 -3.5 -5.3 -4.7 -3.7Russia 7.4 71.9 9.9 -6.1 -0.6 -2.5 -5.5Slovakia -4.5 12.2 14.2 -3.0 -5.5 -3.9 -2.8Slovenia -4.5 12.2 14.2 -3.0 -5.5 -3.9 -2.8Turkey 20.3 8.8 14.6 0.5 1.4 2.2 1.0Ukraine 2.4 92.0 62.9 -2.3 -0.8 -2.1 -2.2

Eastern Europe 6.6 42.4 13.7 -3.8 -1.9 -2.2 -3.4EU Members -1.9 15.6 13.8 -4.0 -5.5 -4.7 -3.7Baltics -4.5 12.2 14.2 -3.0 -5.5 -3.9 -2.8

-8 -4 0 4 8

TurkeyLatvia

UkrainePolandBaltics

EstoniaRomaniaLithuania

EU MembersCzech Republic

BulgariaEastern Europe

CroatiaSlovakia

RussiaHungarySlovenia

0 20 40 60 80

RussiaPoland

Eastern EuropeEU Members

LithuaniaSlovenia

LatviaSlovakiaEstoniaBaltics

RomaniaHungary

TurkeyCzech Republic

CroatiaBulgariaUkraine

-9

-6

-3

0

3

6


2013 2014 2015 2016

-20

0

20

40

60

80


2013 2014 2015 2016



April 2015

Export Growth, 2015

Notes and sources

Note: Nominal annual variation in % of merchandise exports in EUR. Data for Russia, Turkey and Ukraine originally reported in USD, calculated using EUR/USD exchange rate.Sources: National statistical institutes and central banks.

Import Growth, 2015

Notes and sources

Note: Nominal annual variation in % of merchandise imports in EUR. Data for Russia, Turkey and Ukraine originally reported in USD, calculated using EUR/USD exchange rate. Sources: National statistical institutes and central banks.

Exports, annual variation in %

Imports, annual variation in %

2013 2014 2015 2016 2017 2018 2019Bulgaria 7.2 -0.9 5.3 8.0 8.9 7.7 4.6Croatia -0.4 7.9 0.6 6.1 2.3 2.3 2.0Czech Republic -1.3 7.2 10.2 7.3 5.4 5.4 3.3Estonia -1.8 -1.7 -0.9 4.4 4.2 4.0 3.3Hungary 1.7 4.2 4.1 4.2 4.6 5.5 6.2Latvia 1.0 2.0 6.7 4.6 4.5 4.5 4.0Lithuania 6.5 -0.4 0.8 6.8 7.1 7.7 8.2Poland 5.7 5.8 12.2 7.5 7.9 8.4 8.8Romania 10.0 5.8 3.9 8.6 7.9 7.2 6.1Russia -3.1 -9.7 -1.3 9.9 4.5 4.2 5.7Slovakia 3.5 0.6 7.1 5.6 5.5 4.9 4.8Slovenia 1.9 6.5 8.3 10.3 6.9 6.1 5.1Turkey -3.2 4.1 27.3 7.0 4.3 3.9 5.0Ukraine -10.4 -18.8 7.5 12.8 12.5 10.2 7.5

Eastern Europe -0.4 -1.6 7.0 8.0 5.8 5.6 5.9EU Members 3.5 4.4 7.9 6.9 6.5 6.6 6.1Baltics 3.0 -0.2 1.6 5.7 5.8 6.1 6.1

2013 2014 2015 2016 2017 2018 2019Bulgaria 2.1 1.6 5.0 7.0 9.1 6.1 6.0Croatia 1.9 3.4 0.9 4.9 3.1 2.8 2.3Czech Republic -2.9 5.4 10.1 8.0 7.1 6.9 3.5Estonia -1.5 -1.0 -3.5 4.4 3.6 3.5 3.0Hungary 2.0 4.7 4.3 4.1 5.0 5.6 6.6Latvia 0.8 0.0 7.5 5.3 4.4 3.6 3.2Lithuania 5.2 1.1 2.9 7.3 6.6 9.0 9.5Poland 0.2 6.7 11.1 8.3 9.1 9.6 9.8Romania 1.1 5.8 3.6 8.6 8.6 7.2 6.6Russia -0.7 -14.3 -0.9 9.2 4.3 3.8 5.2Slovakia 2.2 0.7 7.2 6.1 5.5 5.3 5.2Slovenia -1.9 4.3 9.0 10.5 8.0 6.4 5.5Turkey 2.8 -3.8 19.6 9.0 3.4 2.8 3.8Ukraine -8.1 -32.0 -2.1 12.9 15.1 13.7 11.7

Eastern Europe 0.0 -3.8 7.3 8.2 6.2 5.9 6.1EU Members 0.4 4.5 7.6 7.3 7.4 7.3 6.8Baltics 2.3 0.3 2.4 6.1 5.3 6.3 6.5 -10 0 10 20

EstoniaUkraineRussiaCroatiaBaltics

LithuaniaRomaniaHungaryBulgariaSlovakia

Eastern EuropeLatvia

EU MembersSlovenia

Czech RepublicPolandTurkey

-20

-10

0

10

20


2013 2014 2015 2016

-10 0 10 20 30

RussiaEstoniaCroatia

LithuaniaBaltics

RomaniaHungaryBulgaria

LatviaEastern Europe

SlovakiaUkraine

EU MembersSlovenia

Czech RepublicPolandTurkey

-10

0

10

20

30


2013 2014 2015 2016



April 2015

International Reserves, 2015

Notes and sources

Note: International reserves as months of imports.Sources: Central banks.

External Debt, 2015

Notes and sources

Note: External debt as % of GDP.Sources: National statistical institutes, central banks and finance ministries.

International Reserves, months of imports

External Debt, % of GDP

2013 2014 2015 2016 2017 2018 2019Bulgaria 7.0 7.9 7.9 7.8 7.6 7.4 7.4Croatia 9.4 8.9 8.9 8.7 8.6 8.6 8.5Czech Republic 5.1 5.3 4.8 4.6 4.4 4.3 4.3Estonia - - - - - - -Hungary 5.4 5.3 5.5 5.4 5.8 6.2 6.1Latvia - - - - - - -Lithuania - - - - - - -Poland 6.2 6.3 6.3 5.9 5.7 5.6 5.3Romania 7.1 6.6 6.7 6.5 6.2 6.0 5.9Russia 16.9 17.0 16.5 14.5 14.6 14.0 13.2Slovakia - - - - - - -Slovenia - - - - - - -Turkey 5.3 6.0 6.1 5.7 5.5 5.3 5.2Ukraine 2.8 1.8 3.5 3.7 3.8 3.5 3.3

Eastern Europe 7.8 7.8 8.2 7.6 7.5 7.2 6.9EU Members 4.9 5.1 5.9 5.6 5.5 5.5 5.3Baltics - - - - - - -

2013 2014 2015 2016 2017 2018 2019Bulgaria 89.9 94.7 92.6 94.8 95.4 90.7 84.9Croatia 104.5 108.6 108.9 108.4 105.8 102.5 99.4Czech Republic 63.7 66.9 67.2 65.7 62.2 61.5 59.9Estonia 93.5 97.2 89.0 86.5 84.0 80.2 76.5Hungary 118.4 114.5 104.5 98.3 97.7 94.2 90.7Latvia 131.5 138.7 121.5 120.8 117.7 116.4 114.6Lithuania 69.7 69.9 71.3 70.9 68.4 65.8 62.3Poland 72.8 64.3 69.9 66.1 62.6 59.9 56.6Romania 67.9 62.9 61.7 59.9 59.3 56.7 53.4Russia 33.1 29.5 43.6 37.3 37.1 37.0 33.4Slovakia 84.2 80.5 103.1 99.2 96.3 90.7 85.1Slovenia 110.7 123.5 116.0 115.4 115.9 115.3 114.6Turkey 47.3 50.3 56.3 53.7 50.9 48.9 46.8Ukraine 78.9 97.7 181.7 177.4 162.3 147.7 135.3

Eastern Europe 52.0 51.2 62.8 58.0 56.0 54.3 50.8EU Members 80.6 77.7 79.3 76.3 73.7 70.9 67.5Baltics 94.1 97.3 90.7 89.8 87.1 84.7 81.6 0 50 100 150 200

Russia

Turkey

Romania

Eastern Europe

Czech Republic

Poland

Lithuania

EU Members

Bulgaria

Slovakia

Hungary

Croatia

Slovenia

Latvia

Ukraine

30

60

90

120


2013 2014 2015 2016

0 5 10 15 20

Lithuania

Ukraine

Czech Republic

Hungary

EU Members

Turkey

Poland

Romania

Bulgaria

Eastern Europe

Croatia

Russia

0

5

10

15

20


2013 2014 2015 2016

FOCUSECONOMICS


April 2015

Economic Release Calendar

(*) Preliminary estimate. (**) Approximate date.

Date Country Event14 April Poland Central Bank Meeting15 April Bulgaria March Consumer Prices15 April Croatia March Consumer Prices15 April Poland March Consumer Prices15 April Russia March Industrial Production (**)17 April Slovakia March Consumer Prices20 April Hungary April GKI-Erste Economic Sentiment Index (**)20 April Poland March Industrial Production (**)20 April Poland April Business Confidence (**)21 April Hungary Central Bank Meeting21 April Lithuania March Industrial Production21 April Russia March Merchandise Trade (**)22 April Turkey Central Bank Meeting22 April Turkey April Consumer Confidence23 April Ukraine March Industrial Production23 April Ukraine Central Bank Meeting24 April Czech Republic April Economic Sentiment24 April Poland March Retail Sales (**)24 April Turkey April Business Confidence29 April Croatia March Industrial Production30 April Estonia March Industrial Production30 April Latvia Q1 2015 National Accounts (*)30 April Lithuania Q1 2015 National Accounts (*)30 April Russia Central Bank Meeting30 April Slovenia April Consumer Prices1 May Czech Republic April HSBC Manufacturing PMI2 May Poland April HSBC Manufacturing PMI4 May Turkey April HSBC Manufacturing PMI4 May Turkey April Consumer Prices5 May Latvia March Industrial Production5 May Poland Central Bank Meeting5 May Russia April HSBC Manufacturing PMI6 May Romania Central Bank Meeting (*)6 May Russia April Consumer Prices (**)7 May Czech Republic March Industrial Production7 May Czech Republic Central Bank Meeting7 May Hungary March Industrial Production (*)7 May Russia April HSBC Services PMI 7 May Ukraine April Consumer Prices8 May Bulgaria March Industrial Production8 May Estonia April Consumer Prices8 May Hungary April Consumer Prices8 May Slovenia March Industrial Production

Calendar

FOCUSECONOMICS


April 2015

Economic Release Calendar

(*) Preliminary estimate. (**) Approximate date.

Date Country Event8 May Turkey March Industrial Production11 May Lithuania April Consumer Prices12 May Czech Republic April Consumer Prices12 May Estonia Q1 2015 National Accounts (*)12 May Latvia April Consumer Prices12 May Slovakia March Industrial Production12 May Turkey March Balance of Payments

FOCUSECONOMICS Bulgaria


April 2015

Bulgaria

REAL SECTOR | Industrial production accelerates in FebruaryIn February, industrial output expanded 2.3% over the same month last year in working-day adjusted terms, according to the National Statistical Institute. The figure was above January’s 1.3% increase. February’s gain was the largest in 9 months and largely reflected an improvement in mining and quarrying.

On a month-on-month basis, industrial production fell a seasonally-adjusted 0.6% in February, which was below the 1.7% expansion recorded in the previous month. Average growth in industrial production fell from January’s 1.6% to 1.4% in February.

FocusEconomics Consensus Forecast participants see industrial production expanding 3.0% in 2015, which is up 0.1 percentage points from last month’s Consensus. For 2016, panelists see industrial output growing 4.0%.

FocusEconomics Consensus Forecast participants expect GDP to expand 1.5% in 2015, which is up 0.1 percentage points from last month’s Consensus. In 2016, panelists see the economy growing 2.0%.

MONETARY SECTOR | Drop in consumer prices moderates in FebruaryIn February, consumer prices rose 0.18% over the previous month, which contrasted January’s 0.38% fall. According to the National Statistical Institute,

The economy picked up pace last year, recording the strongest expansion since 2011 on the back of an acceleration in domestic demand. However, weak demand from the Eurozone, Bulgaria’s largest trading partner, and spillover effects from the sanctions imposed on Russia have limited further growth. Meanwhile, Bulgaria’s state-owned National Electricity Company (NEK) signed an agreement on 8 April with two U.S. power companies, which will allow NEK to save BGN 1.0 billion in costs going forward. Bulgaria’s government has been struggling to reduce NEK’s large deficit while containing politically-sensitive electricity prices. A series of protests, in part over rising electricity bills, led to the toppling of the government in February 2013.

Bulgaria’s outlook has strengthened slightly. An expected pick-up in demand from the Euro area should boost exports this year, while lower oil prices will support private consumption. FocusEconomics Consensus Forecast panelists see the economy expanding 1.5% in 2015, which is up 0.1 percentage points from last month’s forecast. In 2016, the panel expects the economy to pick up speed and grow 2.0%.

Consumer prices fell 0.5% in February, which was above January’s 1.0% drop. The slump in prices for oil and commodities is expected to keep inflationary pressures muted this year. Panelists expect consumer prices to rise 0.2% in 2015, which is down 0.3 percentage points from last month’s forecast. For 2016, panelists see inflation rising to 1.5%.

Outlook improves

LONG-TERM TRENDS | 3-year averages

Angela BouzanisEconomist

Bulgaria

2011-13 2014-16 2017-19Population (million): 7.3 7.2 7.1GDP (EUR bn): 40.7 42.7 47.9GDP per capita (EUR): 5,588 5,955 6,791GDP growth (%): 1.2 1.7 2.7Fiscal Balance (% of GDP): -1.4 -3.1 -1.6Public Debt (% of GDP) 17.3 26.6 26.3Inflation (%): 2.7 -0.4 2.2Current Account (% of GDP): -0.1 0.1 -0.9External Debt (% of GDP): 90.8 94.0 90.3

Industrial Production | variation in %

Note: Year-on-year changes of working-day adjusted and annual average variation of industrial production index in %.Source: National Statistical Institute (NSI).

-10

-5

0

5

10

Feb-13 Aug-13 Feb-14 Aug-14 Feb-15

Year-on-year

Annual average

%



April 2015

increases in consumer prices were recorded in health, communications and education, as well as in food and non-alcoholic beverages.

Consumer prices fell 0.5% year-on-year in February (January: -1.0% yoy). February’s figure marked the 19th consecutive drop in consumer prices. Annual average consumer prices fell 1.1%, which was slightly less than January’s 1.3% drop.

FocusEconomics Consensus Forecast participants expect inflation to end 2015 at 0.2%, which is down 0.3 percentage points from last month’s forecast. For 2016, panelists expect inflation of 1.5%.

Inflation | Consumer Price Index

Note: Year-on-year and month-on-month variation of consumer price index in %.Source: National Statistical Institute (NSI).

-4.0

-2.0

0.0

2.0

4.0

-1.0

-0.5

0.0

0.5

1.0


Month-on-month (left scale)

Year-on-year (right scale)

%%



April 2015

Economic Indicators | 2010 - 2019

Annual Data 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019Real Sector Population (million) 7.5 7.3 7.3 7.2 7.2 7.2 7.1 7.1 7.1 7.0GDP per capita (USD) 6,409 7,634 7,140 7,509 7,744 6,313 6,461 7,052 7,794 8,518GDP (USD bn) 48.1 55.9 52.0 54.3 55.8 45.2 46.1 50.0 55.0 59.8GDP per capita (EUR) 4,899 5,474 5,620 5,671 5,833 5,916 6,116 6,421 6,780 7,171GDP (EUR bn) 36.8 40.1 40.9 41.0 42.0 42.4 43.6 45.6 47.9 50.4GDP (BGN bn) 71.9 78.4 80.0 80.3 82.2 83.0 85.4 89.1 93.6 98.6Economic Growth (Nominal GDP, ann. var. in %) 1.9 9.1 2.1 0.3 2.3 1.0 2.9 4.4 5.0 5.3Economic Growth (GDP, annual var. in %) 0.7 2.0 0.5 1.1 1.7 1.5 2.0 2.6 2.8 2.8Private Consumption (annual var. in %) 0.4 1.9 3.8 -2.3 2.0 1.5 2.4 2.7 3.0 3.1Government Consumption (ann. var. in %) 4.7 2.9 -2.5 2.0 5.8 - - - - -Fixed Investment (annual var. in %) -18.3 -4.6 2.0 -0.1 2.8 2.9 4.6 5.1 5.3 5.4Industrial Production (annual variation in %) 2.0 6.0 -0.2 -0.1 1.7 3.0 4.0 4.3 4.6 4.6Retail Sales (annual variation in %) -8.4 0.6 5.3 2.9 4.2 4.1 4.6 4.7 4.9 5.3Unemployment (% of active population, eop) 9.5 10.4 11.5 11.8 10.7 10.9 10.3 9.9 9.4 9.1Fiscal Balance (% of GDP) -3.1 -2.0 -0.8 -1.5 -3.8 -3.1 -2.6 -1.8 -1.5 -1.5Public Debt (% of GDP) 15.9 15.7 18.0 18.3 25.5 27.0 27.4 26.8 26.2 25.7Monetary and Financial Sector Money (annual variation of M2 in %) 6.4 12.1 8.5 9.0 1.2 - - - - -Inflation (CPI, annual variation in %, eop) 4.5 2.8 4.2 -1.6 -0.9 0.2 1.5 2.1 2.5 2.5Inflation (HICP, annual variation in %, aop) 3.0 3.4 2.4 0.4 -1.6 - - - - -Inflation (PPI, annual var. in %, eop) 7.2 8.6 5.3 -1.3 -0.9 - - - - -Base Rate (%, eop) 0.18 0.22 0.03 0.02 0.02 0.22 0.36 0.78 1.13 1.1510-Year Bond Yield (%, eop) 5.83 5.24 3.43 3.60 3.15 - - - - -Stock Market (SOFIX ann. var. in %) -15.2 -11.1 7.3 42.3 6.2 - - - - -Exchange Rate (BGN per USD, eop) 1.47 1.51 1.48 1.42 1.61 1.88 1.83 1.73 1.67 1.63Exchange Rate (BGN per EUR, eop) 1.96 1.96 1.96 1.96 1.96 1.96 1.96 1.96 1.96 1.96External Sector Current Account Balance (% of GDP) -1.4 0.0 -1.2 1.0 0.0 0.3 -0.1 -0.8 -1.0 -1.0Current Account Balance (EUR bn) -0.5 0.0 -0.5 0.4 0.0 0.1 0.0 -0.4 -0.5 -0.5Merchandise Trade Balance (EUR bn) -2.8 -2.2 -3.5 -2.4 -2.9 -3.1 -3.1 -3.2 -3.1 -1.3Merchandise Exports (EUR bn) 15.6 20.3 20.8 22.3 22.1 23.3 25.1 27.2 29.3 31.2Merchandise Imports (EUR bn) 18.3 22.4 24.2 24.7 25.1 26.3 28.2 30.4 32.5 34.7Merchandise Exports (annual variation in %) 33.3 30.1 2.5 7.2 -0.9 5.3 8.0 8.3 7.9 6.2Merchandise Imports (annual variation in %) 15.1 22.4 8.0 2.1 1.6 5.0 7.0 7.9 6.9 6.7International Reserves (EUR bn) 13.0 13.3 15.6 14.4 16.6 17.2 18.4 19.4 20.1 21.3International Reserves (months of imports) 8.5 7.2 7.7 7.0 7.9 7.9 7.8 7.7 7.4 7.4External Debt (EUR bn) 37.0 36.3 37.7 36.9 39.8 39.3 41.4 43.5 43.4 42.8External Debt (% of GDP) 100.6 90.5 92.1 89.9 94.7 92.6 94.8 95.4 90.7 84.9 Quarterly Data Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16Economic Growth (GDP, annual var. in %) 1.5 1.3 1.3 1.3 1.6 1.7 1.9 2.0 2.0 2.1Economic Growth (GDP, qoq s.a. var. in %) 0.4 0.4 - - - - - - - -Inflation (CPI, annual variation in %, eop) -0.8 -0.9 -0.7 -0.6 -0.2 0.2 0.4 0.9 1.1 1.5Exchange Rate (BGN per USD, eop) 1.55 1.61 1.82 1.86 1.89 1.88 1.87 1.85 1.84 1.83 Monthly Data Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15Industrial Production (annual variation in %) 0.6 0.2 -2.3 0.5 -0.5 0.3 1.4 1.3 2.3 -Retail Sales (annual variation in %) 2.4 4.0 4.0 5.2 3.5 1.7 6.2 5.7 5.6 -Unemployment (% of active population) 10.7 10.6 10.4 10.5 10.7 10.8 10.7 11.1 11.0 -Inflation (CPI, mom variation in %) -0.37 0.43 -0.25 -0.16 0.89 -0.37 0.00 -0.38 0.18 -Inflation (CPI, annual variation in %) -1.9 -1.0 -0.6 -0.8 -0.4 -0.6 -0.9 -1.0 -0.5 -Exchange Rate (BGN per USD, eop) 1.43 1.46 1.48 1.55 1.56 1.57 1.61 1.73 1.74 1.82



April 2015

Real Sector | Gross Domestic Product and Fiscal Balance

1 | Real GDP | 2000-2019 | var. in %

3 | GDP 2015 | evolution of forecasts

5 | Unemployment | % of active pop.

7 | Unemployment | evolution of fcst

2 | Real GDP | Q1 12-Q4 16 | var. in % Economic Growth and Fiscal Balance


6 | Fiscal Balance | % of GDP

8 | Fiscal Balance | evolution of fcst Notes and sources

General: Long-term chart period from 2000 to 2019 unless otherwise stated. All real sector data are from the National Statistical Institute (NSI) and the Bulgarian National Bank (BNB). Forecasts based on FocusEconomics Consensus Forecast. 1 GDP, annual variation in %. Source: BNB and NSI.2 Quarterly GDP (not seasonally adjusted), year-on-year variation in %.

Source: BNB and NSI.3 GDP, evolution of 2015 forecasts during the last 18 months.4 GDP, evolution of 2016 forecasts during the last 18 months.5 Unemployment, % of active population. Source: BNB.6 Balance of non-financial public sector as % of GDP. Source: BNB.7 Unemployment, evolution of 2015 and 2016 forecasts during the last 18

months.8 Balance of non-financial public sector as % of GDP, evolution of 2015

and 2016 forecasts during the last 18 months.

Individual Forecasts 2015 2016 2015 2016Alpha Bank 2.0 - - -Capital Economics 1.0 2.0 -2.8 -2.5Citigroup Global Mkts 1.4 2.0 -3.8 -2.0Deutsche Bank 2.0 2.5 - -Economic Policy Institute 1.6 2.5 -3.0 -2.5EIU 1.4 2.6 -2.9 -2.4Eurobank 1.8 - -3.0 -Frontier Strategy Group 0.8 1.4 - -ING 1.2 1.5 - -JPMorgan 0.8 1.2 -3.3 -2.8KBC 1.7 2.0 - -National Bank of Greece 1.6 2.2 -3.3 -2.7OTP Bank 1.7 2.0 -3.1 -2.5Oxford Economics 2.2 3.1 - -Raiffeisen Research 1.2 2.1 -2.8 -2.5United Bulgarian Bank 0.8 0.8 -3.0 -3.0UniCredit 1.9 2.3 -3.1 -2.8WIIW 1.6 1.9 -3.0 -2.5SummaryMinimum 0.8 0.8 -3.8 -3.0Maximum 2.2 3.1 -2.8 -2.0Median 1.6 2.0 -3.0 -2.5Consensus 1.5 2.0 -3.1 -2.6History30 days ago 1.4 2.0 -2.9 -2.560 days ago 1.4 2.0 -3.0 -2.690 days ago 1.6 2.2 -2.7 -2.4Additional ForecastsIMF (Oct. 2014) 2.0 2.5 - -Euro. Comm. (Feb. 2015) 0.8 1.0 - -

Real GDP Fiscal Balancevariation in % % of GDP

-10

-5

0

5

10

2000 2005 2010 2015

BulgariaEastern EuropeWorld

5

10

15

20

2000 2005 2010 2015


-1

0

1

2

3

4

Q1 12 Q1 13 Q1 14 Q1 15 Q1 16

BulgariaEastern EuropeWorld

0

1

2

3

4


MaximumConsensusMinimum

0

1

2

3

4



9

10

11

12


2015 2016

-4

-3

-2

-1

0


2015 2016

-6

-4

-2

0

2

2000 2005 2010 2015

Bulgaria

Eastern Europe



April 2015

Monetary and External Sector | Inflation and Current Account Balance

9 | Inflation | 2000 - 2019 | in %

11 | Inflation 2015 | evolution of fcst

10 | Inflation | Q1 12-Q4 16 | var. in % Consumer Price Index and Current Account Balance


13 | Current Account | % of GDP 14 | Current Account | evol. of fcst

Notes and sources

General: Long-term chart period from 2000 to 2019 unless otherwise stated. All monetary and external sector data are from the National Statistical Institute (NSI) and the Bulgarian National Bank (BNB). European Commission forecasts refer to annual average harmonized inflation. See below for details. Government forecasts refer to average of period harmonized inflation. See below for details. Forecasts based on FocusEconomics Consensus Forecast. 9 Inflation, annual variation of consumer price index (CPI) in % (eop). Source: NSI.10 Quarterly inflation, annual variation of consumer price index (CPI) in % (eop). Source: NSI.11 Inflation, evolution of 2015 forecasts during the last 18 months.12 Inflation, evolution of 2016 forecasts during the last 18 months.13 Current account balance as % of GDP. Source: BNB.14 Current account balance as % of GDP, evolution of 2015 and 2016 forecasts during the last

18 months.

-4

-3

-2

-1

0

1


2015 2016-30

-20

-10

0

10

2000 2005 2010 2015


-10

0

10

20

30

2000 2005 2010 2015

BulgariaEastern Europe -4

0

4

8

12

Q1 12 Q1 13 Q1 14 Q1 15 Q1 16


-1

0

1

2

3

4



0

1

2

3

4



Individual Forecasts 2015 2016 2015 2016Alpha Bank - - - -Capital Economics -0.3 0.8 0.5 0.0Citigroup Global Mkts -0.2 2.3 -0.2 -0.6Deutsche Bank 0.7 1.8 - -Economic Policy Institute -0.6 1.0 - -EIU 1.3 2.5 -0.2 -0.7Eurobank -0.5 - -0.5 -Frontier Strategy Group 0.3 1.0 - -ING 0.0 1.0 -0.4 -JPMorgan - - -0.8 -0.8KBC -0.3 1.0 - -National Bank of Greece 0.2 1.4 1.6 0.6OTP Bank 1.2 2.3 0.5 0.5Oxford Economics 0.3 2.4 2.3 1.6Raiffeisen Research 0.6 2.0 -0.5 -0.8United Bulgarian Bank - - 0.1 -0.6UniCredit 0.0 1.2 0.4 -0.7WIIW 0.0 1.0 1.2 0.7SummaryMinimum -0.6 0.8 -0.8 -0.8Maximum 1.3 2.5 2.3 1.6Median 0.0 1.3 0.1 -0.6Consensus 0.2 1.5 0.3 -0.1History30 days ago 0.5 1.7 -0.3 -0.760 days ago 0.6 1.6 -0.1 -0.690 days ago 1.0 1.7 -0.3 -0.3Additional ForecastsIMF (Oct. 2014) 1.3 1.2 - -Euro. Comm. (Feb. 2015) -0.5 1.0 - -

CPI Current Accountvariation in % % of GDP



April 2015

Fact Sheet

Bulgaria in the Region

Population | %-share in Eastern Europe GDP | %-share in Eastern Europe

Bulgaria1.3%

Russia 45.6%

Turkey 18.1%

Poland 12.4%

Czech Republic

4.7%

Other18.0%

Bulgaria1.9%

Russia 38.8%

Turkey 20.9%

Ukraine 12.2%

Poland 10.4%

Other15.8%

Russia20.9%

Other EU-27

28.6%

Germany11.2%

Italy6.7%

Romania6.6%

Other25.9%

Turkey9.1%

Other EU-27

25.2%

Germany10.4%

Italy8.7%

Romania8.2%

Other38.4%

Other4.0%

Manufact. Products53.8%

Ores & Metals9.6%

Mineral Fuels23.4%

Food9.2%

Other4.1%


Ores & Metals17.7%

Mineral Fuels14.2%

Food15.7%

Trade Structure

Primary markets | share in %

Primary products | share in %

Economic Structure

GDP by Sector | share in % GDP by Expenditure | share in %

Exports

Exports

Imports

Imports

-20

0

20

40

60

80

100

1202004-06 2007-09 2010-12

Net Exports

Investment

GovernmentConsumption

PrivateConsumption

0

20

40

60

80

1002004-06 2007-09 2010-12

Agriculture

Manufacturing

Other Industry

Services

General Data

Economic Infrastructure

Political Data

Long-term Foreign Currency Ratings

Strengths Weaknesses

• Large external imbalances• Fixed exchange rate restrictsmonetary policy

.

• Lack of structural reforms inkey sectors

• Receiver of large amounts of EU funds• EU membership shields economy against financial crises

• Popular discontent on the state of the economy

Energy (2012) Primary Energy Production (trillion Btu): 442Primary Energy Consumption (trillion Btu): 758Electricity Generation (billion kW-h): 43.7Electricity Consumption (billion kW-h): 31.2Oil Supply (thousand bpd): 3.4Oil Consumption (thousand bpd): 91CO2 Emmissions (million metric tons): 48.8

Agency Rating OutlookMoody’s: Baa2 StableS&P: BB+ StableFitch Ratings: BBB- Stable

Telecommunication (2013) Telephones - main lines (per 100 inhabitants): 26.9Telephones - mobile cellular (per 100 inhabit.): 145Internet Users (per 100 inhabitants): 53.1Broadband Subscriptions (per 100 inhabitants): 19.0

Transportation (2013) Airports: 68Railways (km): 4,152Roadways (km): 19,521Waterways (km): 470Chief Ports: Burgas, Varna

Official name: Republic of BulgariaCapital: Sofia (1.3m)Other cities: Plovdiv (0.7m)

Varna (0.5m)Area (km2): 110,879Population (million, 2014 est.): 7.2Population density (per km2, 2014): 65.0Population growth rate (%, 2014 est.): -0.8Life expectancy (years, 2014 est.): 74.3Illiteracy rate (%, 2011): 1.6Language: BulgarianMeasures: Metric SystemTime: GMT+2

Prime Minister: Boiko BorisovLast elections: 5 October 2014Next elections: 2018Central Bank President: Ivan Iskrov

FOCUSECONOMICS Croatia


April 2015

Croatia

REAL SECTOR | Industrial production rebounds in FebruaryIn February, industrial output rose 2.0% over the same month last year in working-day adjusted terms, contrasting January’s 4.9% drop. The increase reflected a turnaround in manufacturing. Conversely, the mining and quarrying as well as the electricity, gas and steam sectors performed worse than in January.

On a monthly basis, industrial production increased 3.5% in seasonally-adjusted terms in February, contrasting January’s 4.0% decline. The overall trend improved as annual average growth in industrial production inched up from January’s 0.7% to 0.8% in February.

FocusEconomics Consensus Forecast panelists expect industrial production to expand 1.4% in 2015, which is down 0.1 percentage points from last month’s estimate. In 2016, the panel sees industrial production growth at 2.5%.

The Central Bank sees the economy exiting recession and expanding 0.2% in 2015. FocusEconomics panelists expect GDP to rise 0.2% in 2015, which is unchanged from last month’s estimate. In 2016, the panel expects economic growth to accelerate to 1.0%.

That Croatia has been stuck in recession for six years now mainly reflects structural weaknesses such as a costly public sector, low business competitiveness and a rigid labor market. However, the pace of contraction has softened gradually in recent years and, in Q4 2014, GDP expanded for the first time in over three years, albeit timidly. The expansion was mainly due to solid growth in exports. Recent indicators send mixed signals: while industrial production rebounded in February, unemployment remained high. Meanwhile, Finance Minister Boris Lalovac urged banks and holders of Swiss franc-denominated loans to resume talks aimed at finding a model for converting about 60 thousand loans into euros. The value of the loans is estimated at almost 8% of GDP. Talks on the subject had begun in February after the government decided to freeze the exchange rate of the kuna against the Swiss franc for all franc-indexed consumer loans for one year to ease the burden on local borrowers.

FocusEconomics Consensus Forecast panelists expect that the Croatian economy will emerge from recession this year and expand a mild 0.2%, which is unchanged from last month’s projection. For 2016, the panel expects GDP growth to pick up to 1.0%.

Consumer prices fell 0.4% in annual terms in February, which marked a softer decline than January’s record-drop of 0.9%. Panelists expect inflation to average 0.2% in 2015. For 2016, they project that inflation will rise to 1.4%.

Outlook stable


Teresa KerstingEconomist

Croatia

2011-13 2014-16 2017-19Population (million): 4.3 4.3 4.3GDP (EUR bn): 44.3 43.3 47.3GDP per capita (EUR): 10,356 10,120 11,039GDP growth (%): -1.1 0.3 1.9Fiscal Balance (% of GDP): -6.2 -5.0 -3.2Public Debt (% of GDP): 66.7 83.8 89.7Inflation (%): 2.6 0.5 2.1Current Account (% of GDP): 0.0 0.8 -0.1External Debt (% of GDP): 103.5 108.6 102.6


Note: Year-on-year and annual average variation of industrial production index in %.Source: Croatian Bureau of Statistics (CBS).

-6.0

-3.0

0.0

3.0

6.0


Year-on-year

Annual average

%



April 2015

MONETARY SECTOR | Consumer prices record lower annual decline in FebruaryIn February, consumer prices rose 0.3% over the previous month, contrasting January’s 0.6% drop and marking the largest increase since September of last year. According to the Croatian Bureau of Statistics (CBS), the print mainly reflected higher prices for food and non-alcoholic beverages, furnishing and household equipment as well as housing, water, electricity, gas and other fuels.

In annual terms, consumer prices declined 0.4% in February, coming in above January’s 0.9% decrease, which had represented the steepest drop on record. The overall trend stabilized as annual average consumer prices decreased 0.3% in February, matching January’s result.

Meanwhile, the core consumer price index, which does not include more volatile categories such as fresh food and energy, was unchanged over the previous month, coming in above January’s 0.7% decline. Core inflation rose 1.2% in annual terms, exceeding January’s 0.8% increase.

FocusEconomics Consensus Forecast panelists expect that inflation will average 0.2% in 2015, which is down 0.2 percentage points from last month’s forecast. For 2016, the panel sees inflation at 1.4%.


Note: Year-on-year and month-on-month variation of consumer price index in %.Source: Croatian Bureau of Statistics (CBS).

-2.0

0.0

2.0

4.0

6.0

-1.0

-0.5

0.0

0.5

1.0




%%



April 2015


Annual Data 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019Real Sector Population (million) 4.3 4.3 4.3 4.3 4.3 4.3 4.3 4.3 4.3 4.3GDP per capita (USD) 14,219 14,249 13,315 13,548 13,782 10,604 10,846 11,635 12,680 13,650GDP (USD bn) 61.0 61.0 57.0 58.0 59.0 45.4 46.4 49.8 54.3 58.4GDP per capita (EUR) 10,490 10,512 10,278 10,278 10,044 10,048 10,268 10,596 11,031 11,491GDP (EUR bn) 45.0 45.0 44.0 44.0 43.0 43.0 44.0 45.4 47.2 49.2GDP (HRK bn) 328 333 330 330 329 329 337 348 363 379Economic Growth (Nominal GDP, ann. var. in %) -0.9 1.4 -0.6 -0.1 -0.4 0.4 2.4 3.3 4.3 4.4Economic Growth (GDP, annual var. in %) -1.7 -0.3 -2.2 -0.9 -0.4 0.2 1.0 1.7 1.9 2.0Private Consumption (annual var. in %) -1.5 0.3 -3.0 -1.3 -0.7 0.1 0.8 1.6 1.8 2.2Government Consumption (ann. var. in %) -1.6 -0.3 -1.0 0.5 -1.9 - - - - -Fixed Investment (annual var. in %) -15.2 -2.7 -3.3 -1.0 -4.0 0.7 3.0 3.6 3.8 4.0Industrial Production (annual var. in %) -1.4 -1.2 -5.3 -1.9 1.3 1.4 2.5 3.0 3.2 3.2Retail Sales (annual variation in %) -1.2 3.9 -0.8 1.7 -0.4 1.3 2.1 2.0 2.0 1.9Unemployment (% of active population, eop) 18.6 18.6 20.9 21.6 19.6 19.5 18.7 18.0 17.0 16.6Fiscal Balance (% of GDP) -6.0 -7.7 -5.6 -5.2 -5.2 -5.2 -4.7 -3.6 -3.1 -2.9Public Debt (% of GDP) 52.8 59.9 64.4 75.7 81.4 83.9 86.2 87.4 91.0 90.8Monetary and Financial Sector Money (annual variation of M1 in %) 3.0 4.8 3.6 3.5 2.8 - - - - -Inflation (CPI, annual variation in %, aop) 1.0 2.3 3.4 2.2 -0.2 0.2 1.4 1.6 2.4 2.4Inflation (Core, annual variation in %, aop) -0.8 1.8 1.9 1.9 -0.4 - - - - -Inflation (HICP, annual variation in %, aop) 1.1 2.2 3.4 2.3 0.2 - - - - -Inflation (PPI, annual variation in %, eop) 4.3 7.1 5.6 -0.2 -2.6 - - - - -CNB Discount Rate (%, eop) 9.00 7.00 7.00 7.00 7.00 6.75 6.25 6.37 6.50 6.88Stock Market (variation of CROBEX in %) 5.3 -17.6 0.0 3.1 -3.1 - - - - -Exchange Rate (HRK per USD, eop) 5.51 5.82 5.72 5.54 6.33 7.40 7.20 6.83 6.60 6.43Exchange Rate (HRK per USD, aop) 5.50 5.34 5.84 5.70 5.76 7.28 7.29 7.02 6.71 6.51Exchange Rate (HRK per EUR, eop) 7.37 7.54 7.55 7.62 7.66 7.69 7.70 7.71 7.73 7.74Exchange Rate (HRK per EUR, aop) 7.29 7.43 7.51 7.58 7.63 7.68 7.70 7.71 7.72 7.74External Sector Current Account Balance (% of GDP) -1.1 -0.7 -0.2 0.9 0.7 0.9 0.9 0.3 -0.3 -0.3Current Account Balance (EUR bn) -0.5 -0.3 -0.1 0.4 0.3 0.4 0.4 0.1 -0.1 -0.1Merchandise Trade Balance (EUR bn) -6.2 -6.7 -6.6 -6.9 -6.8 -6.8 -7.0 -7.4 -7.6 -7.8Merchandise Exports (EUR bn) 8.9 9.6 9.6 9.6 10.3 10.4 11.0 11.3 11.6 11.8Merchandise Imports (EUR bn) 15.1 16.3 16.2 16.5 17.1 17.2 18.1 18.6 19.2 19.6Merchandise Exports (annual var. in %) 18.3 7.6 0.5 -0.4 7.9 0.6 6.1 2.3 2.3 2.0Merchandise Imports (annual var. in %) -0.5 7.6 -0.4 1.9 3.4 0.9 4.9 3.1 2.8 2.3International Reserves (EUR bn) 10.7 11.2 11.2 12.9 12.7 12.7 13.0 13.3 13.7 13.9International Reserves (months of imports) 8.5 8.2 8.3 9.4 8.9 8.9 8.7 8.6 8.6 8.5External Debt (EUR bn) 46.9 46.4 45.3 46.0 46.7 46.8 47.7 48.0 48.4 48.9External Debt (% of GDP) 104.2 103.1 102.9 104.5 108.6 108.9 108.4 105.8 102.5 99.4 Quarterly Data Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16Economic Growth (GDP, annual var. in %) -0.5 0.3 -0.2 0.3 0.4 0.4 0.6 1.1 1.2 1.3Inflation (CPI, annual variation in %, aop) -0.2 0.0 0.1 0.2 0.3 0.5 1.4 1.5 1.4 1.3Exchange Rate (HRK per USD, eop) 6.07 6.33 7.13 7.29 7.42 7.40 7.34 7.26 7.24 7.20Exchange Rate (HRK per EUR, eop) 7.66 7.66 7.65 7.68 7.69 7.69 7.71 7.68 7.70 7.70 Monthly Data Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15Industrial Production (annual variation in %) -1.7 1.4 -4.7 3.8 2.7 2.8 5.3 -4.9 2.0 -Unemployment (% of active population) 18.3 17.8 17.5 17.7 18.7 19.2 19.6 20.3 20.3 -Inflation (CPI, mom variation in %) -0.4 -0.4 -0.1 0.7 0.1 -0.3 -0.8 -0.6 0.3 -Inflation (CPI, annual variation in %) -0.4 -0.1 -0.3 -0.2 0.4 0.2 -0.5 -0.9 -0.4 -Exchange Rate (HRK per USD, eop) 5.53 5.70 5.80 6.07 6.12 6.17 6.33 6.81 6.85 7.13Exchange Rate (HRK per EUR, eop) 7.58 7.64 7.62 7.66 7.67 7.68 7.66 7.69 7.67 7.65



April 2015


1 | Real GDP | 2000 - 2019 | var. in %







8 | Fiscal Balance | evolution of fcst

Notes and sources

General: Long-term chart period from 2000 to 2019 unless otherwise stated. All real sector data are from the Croatian Bureau of Statistics (CBS). Forecasts based on FocusEconomics Consensus Forecast. 1 GDP, annual variation in %. 2 Quarterly GDP (not seasonally adjusted), year-on-year variation in %. 3 GDP, evolution of 2015 forecasts during the last 18 months.4 GDP, evolution of 2016 forecasts during the last 18 months.5 Unemployment, % of active population. 6 Balance of consolidated general government as % of GDP.7 Unemployment, evolution of 2015 and 2016 forecasts during the last 18

months.8 Balance of consolidated general government as % of GDP, evolution of

2015 and 2016 forecasts during the last 18 months.

Individual Forecasts 2015 2016 2015 2016Capital Economics 0.5 1.5 - -Citigroup Global Mkts 0.3 1.3 -5.6 -5.4Deutsche Bank 0.5 1.4 - -EIU -0.3 1.2 -5.5 -4.6Erste Bank 0.0 0.8 -5.0 -4.5Frontier Strategy Group -0.6 0.0 - -ING 0.2 0.5 -5.7 -5.4Institute of Econ., Zagreb 0.2 0.8 -5.0 -4.8Intercapital 0.5 0.8 -4.6 -3.8JPMorgan 0.3 0.9 -5.2 -4.5Kopint-Tárki 0.5 1.1 -4.9 -4.0OTP Bank 0.3 1.3 -5.4 -5.0Oxford Economics 0.5 1.7 -4.1 -3.8Raiffeisen Research 0.0 1.0 -5.4 -4.5Splitska Banka 0.2 0.8 -5.6 -4.8UniCredit -0.2 0.8 -5.4 -4.6WIIW 0.3 1.1 -5.5 -5.6SummaryMinimum -0.6 0.0 -5.7 -5.6Maximum 0.5 1.7 -4.1 -3.8Median 0.3 1.0 -5.4 -4.6Consensus 0.2 1.0 -5.2 -4.7History30 days ago 0.2 1.0 -5.1 -4.560 days ago 0.2 1.1 -5.0 -4.390 days ago 0.2 1.2 -5.0 -4.4Additional ForecastsCentral Bank (Dec. 2014) 0.2 - - -IMF (Oct. 2014) 0.5 1.4 - -Euro. Comm. (Feb. 2015) 0.2 1.0


-10

-5

0

5

10

2000 2005 2010 2015

CroatiaEastern EuropeWorld

5

10

15

20

25

2000 2005 2010 2015


-4

-2

0

2

4

Q1 12 Q1 13 Q1 14 Q1 15 Q1 16

CroatiaEastern EuropeWorld

-1

0

1

2

3

4



-1

0

1

2

3



18

19

20

21


2015 2016

-5.5

-5.0

-4.5

-4.0

-3.5

-3.0


2015 2016

-8

-6

-4

-2

0

2

2000 2005 2010 2015




April 2015

Monetary and External Sector | Inflation and Exchange Rate

9 | Inflation | in %

11 | Inflation | evolution of forecast

13 | Exchange Rate | HRK per EUR

15 | HRK per EUR | evolution of fcst

10 | Interest Rate | in % Consumer Price Index and Exchange Rate

12 | Interest Rate | evolution of fcst

14 | Current Account | % of GDP

16 | Current Account | evol. of fcst

Notes and sources

General: Long-term chart period from 2000 to 2019 unless otherwise stated. All monetary and external sector data are from the Croatian Bureau of Statistics (CBS) and the Croatia National Bank (HNB, Hrvatska Narodna Banka). See below for details. European Commission forecasts refer to annual average harmonized inflation. Forecasts based on FocusEconomics Consensus Forecast. 9 Inflation, annual variation of consumer price index (CPI) in % (aop).

Source: CBS. 10 Interest rate, CNB Repo Rate in % (eop). Source: CNB. 11 Inflation, evolution of 2015 and 2016 forecasts during the last 18

months.12 Interest rate, evolution of 2015 and 2016 forecasts during the last 18

months.13 Exchange rate, HRK per EUR (eop). Source: Thomson Reuters.14 Current account balance as % of GDP. Source: HNB.15 Exchange rate, evolution of 2015 and 2016 forecasts during the last 18

months.16 Current account balance as % of GDP, evolution of 2015 and 2016

forecasts during the last 18 months.

7.2

7.4

7.6

7.8

2000 2005 2010 2015

-2

-1

0

1


2015 2016

7.4

7.5

7.6

7.7

7.8


2015 2016

-10

-5

0

5

2000 2005 2010 2015


-10

0

10

20

30

2000 2005 2010 2015


0

10

20

30

2000 2005 2010 2015


0

1

2

3


2015 2016

5.5

6.0

6.5

7.0

7.5


2015 2016

Individual Forecasts 2015 2016 2015 2016Capital Economics -0.5 0.5 - -Citigroup Global Mkts -0.2 1.4 - -Deutsche Bank - - - -EIU -0.5 1.5 7.70 7.72Erste Bank -0.2 1.6 - -Frontier Strategy Group -0.1 0.8 - -ING 0.6 2.1 7.70 7.77Institute of Econ., Zagreb 0.1 1.0 7.67 7.68Intercapital 0.6 1.4 7.68 7.68JPMorgan 1.2 1.7 7.72 7.74Kopint-Tárki 0.0 1.6 7.66 7.70OTP Bank 0.7 1.9 7.78 7.81Oxford Economics 0.8 2.3 - -Raiffeisen Research 0.2 1.4 7.72 7.70Splitska Banka 0.8 1.2 7.50 7.50UniCredit 0.0 1.9 7.73 7.65WIIW 0.4 0.5 7.73 7.79SummaryMinimum -0.5 0.5 7.50 7.50Maximum 1.2 2.3 7.78 7.81Median 0.2 1.5 7.70 7.70Consensus 0.2 1.4 7.69 7.70History30 days ago 0.4 1.5 7.69 7.7060 days ago 0.7 1.4 7.67 7.6990 days ago 1.2 1.8 7.67 7.66Additional ForecastsIMF (Oct. 2014) 0.2 1.0 - -Euro. Comm. (Feb. 2015) -0.3 1.0

Prices (CPI) Exchange Ratevariation in % HRK per EUR



April 2015

Fact Sheet

Croatia in the Region


Croatia1.3%

Russia 47.1%

Turkey 18.1%

Poland 11.4%

Czech Republic

4.7%

Other17.3%

Croatia1.2%

Russia 38.8%

Turkey 20.3%

Ukraine 12.3%

Poland 10.4%

Other17.0%

Russia7.6%

Other EU-27

26.9%

Italy16.7%

Germany12.9%

Slovenia5.9%

China7.1%

Other22.9%

Other EU-27

17.4%

Italy14.9%

Germany10.6%

Slovenia8.8%

Other48.3%

Other3.9%


Mineral Fuels21.2%

Food11.0%

Other4.4%


Ores & Metals5.0%

Mineral Fuels12.7%

Food11.9%

Trade Structure



Economic Structure


Exports

Exports

Imports

Imports

-20

0

20

40

60

80

100

1202004-06 2007-09 2010-12

Net Exports

Investment


PrivateConsumption

0

20

40

60

80

1002004-06 2007-09 2010-12

Agriculture

Manufacturing

Other Industry

Services

General Data


Political Data



• Inflation relatively contained • Elevated external debt ratio• Competitive tourism industry • High unemployment levels

. .

• EU accession promotes economic development

• Lack of reforms in the judiciary system

Energy (2012)Primary Energy Production (trillion Btu): 148Primary Energy Consumption (trillion Btu): 405Electricity Generation (billion kW-h): 10.0Electricity Consumption (billion kW-h): 19.6Oil Supply (thousand bpd): 20.1Oil Consumption (thousand bpd): 82CO2 Emmissions (million metric tons): 20.2

Agency Rating OutlookMoody’s: Ba1 NegativeS&P: BB StableFitch Ratings: BB Stable


Transportation (2013) Airports: 69Railways (km): 2,722Roadways (km): 29,410Waterways (km): 785Chief Ports: Rijeka, Split

Official name: Republic of CroatiaCapital: Zagreb (1.1 m)Other cities: Split (0.2 m)

Rijeka (0.1 m)Area (km2): 56,594Population (million, 2014 est.): 4.3Population density (per km2, 2014): 75.6Population growth rate (%, 2014 est.): -0.1Life expectancy (years, 2014 est.): 76.4Illiteracy rate (%, 2002): 1.1Language: CroatianMeasures: Metric systemTime: GMT+1

Prime Minister: Zoran MilanovićLast elections: 4 December 2011Next elections: February 2016Central Bank Governor: Boris Vujčić

FOCUSECONOMICS Czech Republic


April 2015

Czech Rep.

REAL SECTOR | Manufacturing PMI inches up in MarchIn March, the manufacturing Purchasing Managers’ Index (PMI), elaborated by HSBC in collaboration with Markit, increased slightly from February’s 55.6 to 56.1. As a result, the manufacturing PMI moved a bit further above the 50-threshold, where it has been since May 2013.

March’s slight improvement mainly reflects that new orders and, to a lesser extent, employment, purchasing activity and stocks of purchases all grew at a slightly faster pace than in the previous month. Conversely, output growth slowed slightly, resulting in a faster increase in backlogs. Input prices registered their first increase in three months, however output prices remained broadly unchanged over the previous month.

HSBC/Markit commented that, “[t]he Czech manufacturing sector has seen strong growth throughout the first three months of the year […]. This boost […] lends support to the CNB’s view that economic growth will accelerate gradually following a slowdown in late-2014. PMI output data for February and March suggest that the 5.5% official year-on-year growth rate of industrial output seen in January (adjusted for calendar effects) will be broadly maintained. Moreover, a wider European recovery in 2015, hinted at recently by the strong March reading from the Flash Eurozone PMI, should provide further support to

After two years in recession, the Czech Republic returned to growth last year. The latest economic indicators suggest that the country remains on solid footing: industrial production picked up and unemployment moderated in February. In addition, the Manufacturing PMI and economic sentiment continue to point to expansion, even though the latter edged down for a third consecutive month in March. Prime Minister Bohuslav Sobotka said in April that the Czech Republic should set a specific date for adopting the euro as its currency and supported 2020 as nearest possible date, even though the three-party governing coalition has not actually agreed on switching currency.

FocusEconomics Consensus Forecast panelists expect the Czech Republic to grow at a robust pace this year. The panel projects that GDP will expand 2.4% in 2015, which is unchanged from last month’s estimate. For 2016, the panel foresees growth of 2.7%.

Inflation inched up from 0.1% in February to 0.2% in March, the highest reading in four months. Nevertheless, inflation remains below the lower bound of the Central Bank’s target range. At its 26 March monetary policy meeting, the Bank kept the two-week repo rate on hold at 0.05% for the 19th consecutive meeting. The panel expects inflation of 0.4% in 2015, which is down 0.2 percentage points from last month’s estimate. For 2016, panelists foresee inflation of 1.7%.

Outlook stable


2011-13 2014-16 2017-19Population (million): 10.5 10.6 10.6GDP (EUR bn): 160 160 188GDP per capita (EUR): 15,214 15,190 17,794GDP growth (%): 0.2 2.4 2.5Fiscal Balance (% of GDP): -2.7 -2.0 -1.7Public Debt (% of GDP): 44.1 44.1 43.0Inflation (%): 2.2 0.8 2.1Current Account (% of GDP): -1.4 0.2 -0.9External Debt (% of GDP): 59.7 66.6 61.2

Czech Republic


Purchasing Managers’ Index

Note: HSBC Manufacturing Purchasing Managers’ Index (PMI). A reading above 50 indicates an expansion in business activity while a value below 50 points to a contraction.Source: HSBC and Markit.

45

50

55

60

Mar-12 Sep-12 Mar-13 Sep-13 Mar-14 Sep-14 Mar-15



April 2015

Czech manufacturing growth. Meanwhile, both PMI price indicators continue to signal a lack of inflationary pressures.”

The Czech National Bank expects the economy to expand 2.6% in 2015 and 3.0% in 2016. FocusEconomics Consensus Forecast panelists expect the economy to expand 2.4% in 2015, which is unchanged over the previous month’s projection. For 2016, the panel sees GDP increasing 2.7%.

REAL SECTOR | Industry picks up in FebruaryIn February, industrial production grew 4.5% over the same month last year, coming in above the 2.8% expansion observed in January. According to the Statistical Office, February’s expansion mainly came on the back of increased manufacture of vehicles as well as of electricity, gas, steam and air conditioning supply.

A sequential comparison shows that industrial production accelerated from a 0.3% rise in January to a 0.7% increase in February.

The trend continued to moderate as annual average growth in industrial production edged down from 4.7% in January to 4.5% in February, which marked the lowest rate in nine months.

FocusEconomics Consensus Forecast panelists expect industrial output to expand 4.4% in 2015, which is unchanged from last month’s forecast. For 2016, panelists expect industrial output to expand 5.0%.

OUTLOOK | Economic sentiment recedes slightly in March The economic sentiment indicator published by the Czech Statistics Office (CSO) inched down from February’s 95.5 to 95.1 in March. March’s print represents a third consecutive drop, after sentiment had followed a continuous upward trend in previous months and reached an over-six-year high in December. March’s reading reflects a mild moderation in business sentiment, whereas consumer confidence remained unchanged. As a result, the index moved a bit further below its 100-point long-term average.

Business sentiment edged down from February’s 93.4 points to 92.9 points in March, the lowest print in five months. The moderation was driven by declining confidence in the services and trade sectors. Conversely, confidence improved in the industry sector and remained unchanged in the construction sector.

FocusEconomics panelists see fixed investment increasing 4.1% in 2015, which is unchanged from last month’s projection. For 2016, panelists expect investment to expand 4.3%.

Consumer confidence remained at February’s 105.7 points. According to the survey, consumers’ of the overall economic situation, unemployment, their own financial situation and their saving capacity was unchanged compared to the previous month. However, households’ worries about price increases rose compared to February.

FocusEconomics panelists expect private consumption to expand 2.2% in 2015, which is unchanged from last month’s projection. For 2016, the panel sees private consumption growing 2.3%.

Economic Sentiment Index

Note: Economic Sentiment Indicator is a weighted average of confidence indicators in industry, construction, trade, selected services and consumer confidence indicator. 2005 =100.Source: Czech Statistical Office (CSO).

70

80

90

100

110


Economic sentimentBusiness confidenceConsumer confidence


Note: Year-on-year changes and annual average variation of industrial production index in %.Source: Czech Statistical Office (CSO).

-10

-5

0

5

10


Year-on-year Annual average

%



April 2015

MONETARY SECTOR | Inflation inches up in MarchIn March, consumer prices rose 0.1% over the previous month, coming in slightly below the 0.2% increase registered in February. According to the Czech Statistical Office, March’s increase mainly reflects higher prices for transport as well as for alcoholic beverages and tobacco.

In March, annual headline inflation inched up from January’s 0.1% to 0.2%, the highest reading in four months. The reading fell slightly short of the 0.3% rise that the market had expected. Inflation remains well below the Czech National Bank’s (CNB) target range of 1.0% to 3.0%.

The CNB expects consumer prices to drop 0.1% on average in 2015. FocusEconomics Consensus Forecast panelists forecast that inflation will average 0.4% in 2015, which is down 0.2 percentage points from last month’s Consensus. For 2016, panelists expect inflation to rise to 1.7%.

MONETARY SECTOR | Central Bank leaves rate on hold for 19th consecutive meetingAt its 26 March monetary policy meeting, the Czech National Bank (CNB) kept the two-week repo rate on hold at 0.05% for the 19th consecutive meeting. The Central Bank also reaffirmed its commitment to intervene in the foreign exchange market in order to keep the Czech koruna at close to CZK 27.0 per EUR until the end of 2016. The floor for the exchange rate was set in November 2013.

According to the Bank, the Czech economy slowed down slightly more than expected in the final quarter of 2014, due to the fact that inventories’ performance was worse than expected. Conversely, the remaining GDP components performed better than forecast. The Bank expects GDP growth to speed up gradually toward 3.0% in 2016, sustained by stronger external demand, accommodative monetary policy conditions, the effect of low oil prices, and a recovery in public investment. As for the labor market, the Bank pointed out that recent indicators sent mixed signals: while the share of unemployed persons dropped faster than forecast, wage growth was below expectations.

Regarding price developments, the Central Bank stressed that inflation was close to but above zero in February and noted that the risks to the Bank’s current inflation forecast were “anti-inflationary”. While the Central Bank restated that it will tolerate a temporary decrease in inflation, it also reiterated that it might change the level of the exchange rate cap to ensure that inflation converges toward the target rate in the longer term, pointing out that the probability of such a move had increased compared to the previous meeting, owing to the increased anti-inflationary risks to the inflation outlook. The next monetary policy meeting is scheduled for 7 May.

For 2015, FocusEconomics Consensus Forecast panel participants see the two-week repo rate at 0.05%. Analysts expect the Czech koruna to trade at CZK 27.6 per EUR at the end of 2015. For 2016, the panel expects the two-week repo rate to be 0.18% and see the koruna trading at CZK 27.1 per EUR.


Note: Month-on-month and year-on-year variation of consumer price index in %.Source: Czech Statistical Office (CSO).

0.0

0.5

1.0

1.5

2.0

-0.6

-0.3

0.0

0.3

0.6

Mar-13 Sep-13 Mar-14 Sep-14 Mar-15



%%

Monetary Policy Rate | in %

Note: 2-week repo rate in %.Source: Czech National Bank (CNB).

0.0

0.5

1.0

1.5

Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15

%



April 2015


Annual Data 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019Real Sector Population (million) 10.5 10.5 10.5 10.5 10.5 10.6 10.6 10.6 10.6 10.6GDP per capita (USD) 19,590 21,630 19,368 19,710 19,524 16,083 16,727 18,255 20,200 22,164GDP (USD bn) 205 227 203 207 206 170 177 193 214 235GDP per capita (EUR) 14,963 15,531 15,217 14,893 14,664 15,071 15,836 17,148 17,574 18,660GDP (EUR bn) 157 163 160 157 154 159 167 181 186 198GDP (CZK bn) 3,954 4,022 4,048 4,086 4,266 4,384 4,578 4,788 5,005 5,235Economic Growth (Nom. GDP, ann. var. in %) 0.8 1.7 0.6 1.0 4.4 2.8 4.4 4.6 4.5 4.6Economic Growth (GDP, annual var. in %) 2.1 2.0 -0.7 -0.7 2.0 2.4 2.7 2.6 2.5 2.4Private Consumption (annual var. in %) 0.9 0.3 -1.8 0.4 1.7 2.2 2.3 2.5 2.7 2.8Government Consumption (ann. var. in %) 0.4 -2.9 -1.0 2.3 2.3 - - - - -Fixed Investment (annual var. in %) 1.0 1.1 -2.8 -4.4 4.5 4.1 4.3 4.0 3.4 3.4Industrial Production (annual var. in %) 8.6 5.9 -0.8 -0.1 4.9 4.4 5.0 4.3 4.2 4.1Retail Sales (annual variation in %) 1.5 1.7 -1.1 1.2 5.4 3.8 3.0 2.5 2.5 2.3Unemployment (% of active population, aop) 7.0 6.7 6.8 7.7 7.7 7.0 6.7 6.3 6.2 6.2Fiscal Balance (% of GDP) -4.4 -2.9 -4.0 -1.3 -1.8 -2.2 -1.9 -1.8 -1.7 -1.6Public Debt (% of GDP) 38.2 41.0 45.5 45.7 44.4 44.1 43.9 43.1 43.0 42.7Monetary and Financial Sector Money (annual variation of M2 in %) 2.2 4.1 4.6 5.0 6.6 - - - - -Inflation (CPI, annual variation in %, aop) 1.5 1.9 3.3 1.4 0.4 0.4 1.7 2.0 2.1 2.2Inflation (Core, annual variation in %, aop) 0.4 0.1 -0.3 0.3 -0.2 - - - - -Inflation (HICP, annual variation in %, aop) 1.2 2.1 3.5 1.4 0.4 - - - - -Inflation (PPI, annual variation in %, eop) 3.7 4.5 1.2 1.7 -3.7 - - - - -2-Week Repo Rate (%, eop) 0.75 0.75 0.05 0.05 0.05 0.05 0.18 0.95 1.70 2.533-Month PRIBOR (%, eop) 1.22 1.16 0.50 0.38 0.34 0.34 0.44 1.29 2.09 2.5810-Year Bond Yield (%, eop) 3.91 3.61 1.87 2.35 0.48 0.74 1.23 2.14 2.79 2.99Stock Market (variation of PX-50 in %) 9.6 -25.6 14.0 -4.8 -4.3 - - - - -Exchange Rate (CZK per USD, eop) 18.8 19.9 19.1 19.9 22.8 26.6 25.3 24.0 22.8 21.8Exchange Rate (CZK per USD, aop) 19.1 17.7 19.6 19.6 20.8 25.8 25.9 24.8 23.4 22.3Exchange Rate (CZK per EUR, eop) 25.1 25.8 25.1 27.4 27.7 27.6 27.1 27.1 26.7 26.2Exchange Rate (CZK per EUR, aop) 25.3 24.6 25.1 26.0 27.5 27.6 27.4 26.4 26.9 26.5External Sector Current Account Balance (% of GDP) -3.6 -2.1 -1.6 -0.5 0.6 0.1 -0.1 -0.8 -0.9 -1.0Current Account Balance (EUR bn) -5.7 -3.5 -2.5 -0.8 1.0 0.2 -0.2 -1.4 -1.7 -1.9Merchandise Trade Balance (EUR bn) 1.6 3.1 4.9 6.5 8.7 9.5 9.3 8.1 6.7 6.6Merchandise Exports (EUR bn) 87.1 99.1 104.4 103.1 110.6 121.9 130.8 137.8 145.3 150.1Merchandise Imports (EUR bn) 85.5 96.0 99.5 96.7 101.9 112.2 121.2 129.7 138.6 143.5Merchandise Exports (annual variation in %) 20.3 13.8 5.4 -1.3 7.2 10.2 7.3 5.4 5.4 3.3Merchandise Imports (annual variation in %) 22.3 12.3 3.7 -2.9 5.4 10.1 8.0 7.1 6.9 3.5International Reserves (EUR bn) 31.7 31.0 34.0 40.8 45.0 44.7 46.5 47.2 49.7 51.3International Reserves (months of imports) 4.4 3.9 4.1 5.1 5.3 4.8 4.6 4.4 4.3 4.3External Debt (EUR bn) 86.0 89.3 96.9 99.7 103.4 106.9 109.9 112.9 114.5 118.3External Debt (% of GDP) 55.0 54.8 60.6 63.7 66.9 67.2 65.7 62.2 61.5 59.9 Quarterly Data Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16Economic Growth (GDP, annual var. in %) 2.2 1.4 2.1 2.3 2.6 2.9 2.9 2.8 2.6 2.5Economic Growth (GDP, qoq variation in %) 0.4 0.4 - - - - - - - -Inflation (CPI, annual variation in %, aop) 0.6 0.5 0.1 0.3 0.3 0.4 1.5 1.7 1.7 1.72-Week Repo Rate (%, eop) 0.05 0.05 0.05 0.05 0.05 0.05 0.07 0.08 0.11 0.183-Month PRIBOR (%, eop) 0.35 0.34 0.32 0.33 0.33 0.34 0.37 0.37 0.40 0.4410-Year Bond Yield (%, eop) 1.19 0.48 0.27 0.60 0.72 0.74 0.88 0.90 1.07 1.23Exchange Rate (CZK per USD, eop) 21.9 22.8 25.6 26.2 26.6 26.6 26.1 25.9 25.6 25.3Exchange Rate (CZK per EUR, eop) 27.5 27.7 27.5 27.6 27.5 27.6 27.4 27.4 27.3 27.1 Monthly Data Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15Industrial Production (annual variation in %) 8.3 8.4 -5.7 8.6 3.2 -0.4 7.3 2.8 4.5 -Unemployment (% of active population) 7.4 7.4 7.4 7.3 7.1 7.1 7.5 7.7 7.5 7.2Economic Sentiment Index (2005 = 100) 93.6 93.0 93.4 93.7 94.1 95.2 96.5 96.4 95.5 95.1HSBC Manufacturing PMI (50-threshold) 54.7 56.5 54.3 55.6 54.4 55.6 53.3 56.1 55.6 56.1Inflation (CPI, mom variation in %) 0.0 0.2 -0.1 -0.2 0.2 -0.2 -0.1 0.1 0.2 0.1Inflation (CPI, annual variation in %) 0.0 0.5 0.6 0.7 0.7 0.6 0.1 0.1 0.1 0.2Exchange Rate (CZK per USD, eop) 20.1 20.6 21.0 21.9 22.2 22.2 22.8 24.6 24.4 25.6Exchange Rate (CZK per EUR, eop) 27.5 27.6 27.7 27.5 27.8 27.7 27.7 27.8 27.4 27.5Merchandise Exports (annual variation in %) 16.6 20.4 4.1 18.5 12.2 6.0 10.6 2.7 7.7 -



April 2015

0%

10%

20%

30%

40%

50%

< 1.3 1.6 1.9 2.2 2.5 2.8 3.1 3.4 > 3.4

Real Sector | Gross Domestic Product

1 | Real GDP | 2000-2019 | var. in %


2 | Real GDP | Q1 12-Q4 16 | var. in % Real GDP growth in %


Notes and sources

Long-term chart period from 2000 to 2019 unless otherwise stated. All real sector data are from the Czech Statistical Office (CSO). Forecasts are based on FocusEconomics Consensus Forecast.1 GDP, real annual variation in %. 2 Quarterly GDP (seasonally adjusted), year-on-year variation in %.3 GDP, evolution of 2015 forecasts during the last 18 months.4 GDP, evolution of 2016 forecasts during the last 18 months.5 GDP, panelist distribution of 2015 forecasts. Concentration of panelists in forecast interval in

%. Higher columns with darker colors represent a larger number of panelists.

Individual Forecasts 2015 2016BofA Merrill Lynch 3.0 3.1Capital Economics 2.3 3.0Citigroup Global Mkts 2.7 3.2Credit Agricole 2.5 2.8Credit Suisse 1.8 3.2CSOB / Patria Finance 2.0 2.5Danske Bank 2.5 3.1DekaBank 2.1 2.6Deutsche Bank 2.6 2.5EIU 2.9 2.8Erste Bank 2.6 2.2Experian 2.6 3.1Frontier Strategy Group 1.8 2.2Goldman Sachs 2.4 2.8HSBC 2.4 2.7ING 2.5 3.0J&T Banka 2.2 2.5JPMorgan 2.5 2.4Komerční Banka 2.2 2.7Nomura 2.1 2.4Oxford Economics 2.8 2.9Raiffeisen Research 2.4 3.0UBS 2.3 2.4UniCredit 2.5 2.7WIIW 2.3 2.4SummaryMinimum 1.8 2.2Maximum 3.0 3.2Median 2.4 2.7Consensus 2.4 2.7History30 days ago 2.4 2.760 days ago 2.4 2.890 days ago 2.4 2.8Additional ForecastsCentral Bank (Feb. 2015) 2.6 3.0IMF (Oct. 2014) 2.5 2.4European Commission (Feb. 2015) 2.5 2.6

-10

-5

0

5

10

2000 2005 2010 2015

Czech RepublicEastern EuropeWorld

-4

-2

0

2

4

Q1 12 Q1 13 Q1 14 Q1 15 Q1 16

Czech RepublicEastern EuropeWorld

0

1

2

3

4



0

1

2

3

4



5 | GDP 2015 | Panelist Distribution



April 2015

Real Sector | Additional forecasts

9 | Investment | evol. of forecasts

3.0

3.5

4.0

4.5


2015 2016

8 | Investment | variation in %

-20

-10

0

10

20

2000 2005 2010 2015

Czech Republic

Eastern Europe

7 | Consumption | evolution of fcst

1.5

1.7

1.9

2.1

2.3

2.5


2015 2016

6 | Consumption | variation in %

-5

0

5

10

2000 2005 2010 2015

Czech RepublicEastern Europe

Individual Forecasts 2015 2016 2015 2016BofA Merrill Lynch - - - -Capital Economics 2.0 2.5 4.0 5.0Citigroup Global Mkts 2.3 2.5 5.0 5.7Credit Agricole - - - -Credit Suisse - - - -CSOB / Patria Finance 2.4 2.3 3.9 3.0Danske Bank 2.5 3.1 2.3 3.1DekaBank - - - -Deutsche Bank 1.6 2.0 - -EIU 2.2 1.8 4.5 4.3Erste Bank - - - -Experian 2.2 2.6 3.4 4.0Frontier Strategy Group 2.2 2.5 - -Goldman Sachs - - - -HSBC 1.8 2.0 6.0 5.0ING - - - -J&T Banka 1.9 2.5 3.3 3.5JPMorgan - - - -Komerční Banka 2.8 1.5 4.2 4.4Nomura - - - -Oxford Economics 2.5 2.6 4.2 4.4Raiffeisen Research 2.4 2.1 3.0 4.0UBS 2.5 2.0 4.0 5.0UniCredit 2.2 2.0 4.0 3.5WIIW 2.4 2.5 5.5 5.5SummaryMinimum 1.6 1.5 2.3 3.0Maximum 2.8 3.1 6.0 5.7Median 2.3 2.4 4.0 4.4Consensus 2.2 2.3 4.1 4.3History30 days ago 2.2 2.3 4.1 4.260 days ago 2.2 2.3 3.9 4.190 days ago 2.1 2.3 3.9 4.4

Consumption Investment variation in % variation in %

Notes and sources

Long-term chart period from 2000 to 2019 unless otherwise stated. All real sector data are from the Czech Statistical Office (CSO). Forecasts are based on FocusEconomics Consensus Forecast.6 Private consumption, annual variation in %. 7 Private consumption, evolution of 2015 and 2016 forecasts during the last 18 months.8 Gross fixed investment, annual variation in %.9 Gross fixed investment, evolution of 2015 and 2016 forecasts during the last 18 months.

Consumption and Investment



April 2015


Individual Forecasts 2015 2016 2015 2016BofA Merrill Lynch - - - -Capital Economics 5.0 7.0 - -Citigroup Global Mkts - - - -Credit Agricole - - - -Credit Suisse - - - -CSOB / Patria Finance 3.5 4.0 6.9 6.5Danske Bank - - - -DekaBank - - - -Deutsche Bank 5.3 5.5 7.2 6.8EIU 4.7 4.5 7.2 6.8Erste Bank - - - -Experian - - - -Frontier Strategy Group 3.3 4.0 7.0 6.6Goldman Sachs - - - -HSBC 3.4 4.5 7.2 7.0ING - - - -J&T Banka 5.0 3.5 6.9 6.5JPMorgan - - - -Komerční Banka 6.5 8.5 6.8 6.7Nomura - - - -Oxford Economics 3.9 4.1 7.2 6.9Raiffeisen Research 4.6 4.9 7.0 6.8UBS 5.0 6.0 - -UniCredit 3.0 4.0 6.8 6.5WIIW 4.5 5.0 - -SummaryMinimum 3.0 3.5 6.8 6.5Maximum 6.5 8.5 7.2 7.0Median 4.6 4.5 7.0 6.8Consensus 4.4 5.0 7.0 6.7History30 days ago 4.4 5.0 7.2 6.960 days ago 4.4 4.9 7.1 6.890 days ago 4.5 5.0 7.2 7.0

Industry Unemployment variation in % % of active pop.

Notes and sources

Long-term chart period from 2000 to 2019 unless otherwise stated. All real sector data are from the Czech Statistical Office (CSO) and the Czech Ministry of Labor and Social Affairs (MPSV). Forecasts are based on FocusEconomics Consensus Forecast.10 Industrial production, annual variation in %. Source: CSO.11 Industrial production, evolution of 2015 and 2016 forecasts during the last 18 months.12 Unemployment, % of active population. Source: MPSV. Historical data and forecasts are consistent with the new

methodology.13 Unemployment, evolution of 2015 and 2016 forecasts during the last 18 months.

Industry and Unemployment 10 | Industry | variation in %

-20

-10

0

10

20

2000 2005 2010 2015


11 | Industry | evol. of forecasts

4.0

4.5

5.0

5.5


2015 2016


4

6

8

10

12

2000 2005 2010 2015


13 | Unemployment | evol. of forecasts

6.5

6.7

6.9

7.1

7.3


2015 2016



April 2015


42

44

46

48

50


2015 2016

17 | Public Debt | evol. of forecasts

10

20

30

40

50

2000 2005 2010 2015


16 | Public Debt | % of GDP

-8

-6

-4

-2

0

2

2000 2005 2010 2015

Czech Republic

Eastern Europe


-3.0

-2.5

-2.0

-1.5


2015 2016

15 | Fiscal Balance | evol. of forecasts

Fiscal Balance and Public Debt

Individual Forecasts 2015 2016 2015 2016BofA Merrill Lynch - - - -Capital Economics -1.8 -1.8 47.0 46.5Citigroup Global Mkts -2.3 -2.0 41.8 41.9Credit Agricole - - - -Credit Suisse -2.5 - 45.5 -CSOB / Patria Finance -2.4 -2.3 46.6 46.9Danske Bank - - - -DekaBank -2.0 -1.5 - -Deutsche Bank -2.1 -2.2 44.9 45.6EIU -1.7 -1.6 43.6 43.7Erste Bank -2.0 -1.6 41.8 42.1Experian -2.5 -2.4 - -Frontier Strategy Group - - - -Goldman Sachs - - - -HSBC -2.3 -1.7 44.8 44.4ING - - - -J&T Banka -2.1 -1.9 44.0 44.0JPMorgan -2.5 -2.4 41.7 41.1Komerční Banka -2.6 -2.2 42.3 41.7Nomura - - - -Oxford Economics -1.9 -1.7 - -Raiffeisen Research -2.5 -1.8 43.2 43.1UBS -2.0 -1.5 45.0 44.0UniCredit -2.5 -2.5 44.6 45.2WIIW -1.8 -2.0 45.0 44.8SummaryMinimum -2.6 -2.5 41.7 41.1Maximum -1.7 -1.5 47.0 46.9Median -2.2 -1.9 44.6 44.0Consensus -2.2 -1.9 44.1 43.9History30 days ago -2.1 -1.9 44.4 44.260 days ago -2.1 -1.9 44.6 44.390 days ago -2.2 -1.9 44.5 44.3

Fiscal Balance Public Debt % of GDP % of GDP

Notes and sources

Long-term chart period from 2000 to 2019 unless otherwise stated. All real sector data are from Eurostat. Forecasts are based on FocusEconomics Consensus Forecast.14 General government balance as % of GDP. 15 General government balance as % of GDP, evolution of 2015 and 2016 forecasts during the last 18 months. 16 Public debt as % of GDP.17 Public debt as % of GDP, evolution of 2015 and 2016 forecasts during the last 18 months.



April 2015

0%

20%

40%

60%

< -1.0 -0.6 -0.2 0.2 0.6 1.0 1.4 1.8 > 1.8

Monetary Sector | Inflation

18 | Inflation | 2000 - 2019 | in %


19 | Inflation | Q1 12-Q4 16 | in %


Notes and sources

Long-term chart period from 2000 to 2019 unless otherwise stated. All monetary sector data are from the Czech Statistical Office (CSO). Forecasts are based on FocusEconomics Consensus Forecast.18 Inflation, annual variation of consumer price index (CPI) in % (aop).19 Quarterly inflation, annual variation of consumer price index (CPI) in % (aop).20 Inflation, evolution of 2015 forecasts during the last 18 months.21 Inflation, evolution of 2016 forecasts during the last 18 months.22 Inflation, panelist distribution of 2015 forecasts. Concentration of panelists in forecast interval

in %. Higher columns with darker colors represent a larger number of panelists.

Individual Forecasts 2015 2016BofA Merrill Lynch 0.1 1.6Capital Economics 0.3 1.3Citigroup Global Mkts 0.6 1.8Credit Agricole 0.7 1.7Credit Suisse - -CSOB / Patria Finance 0.8 2.0Danske Bank 0.3 2.1DekaBank 0.8 2.6Deutsche Bank 0.3 1.9EIU 0.0 1.4Erste Bank 0.3 1.6Experian - -Frontier Strategy Group 0.7 1.2Goldman Sachs 0.0 1.5HSBC 0.7 1.7ING 0.4 1.7J&T Banka 0.3 1.3JPMorgan 0.3 1.9Komerční Banka 0.4 2.0Nomura -0.2 1.1Oxford Economics 0.2 1.9Raiffeisen Research 0.2 1.7UBS 0.5 1.7UniCredit 0.4 1.6WIIW 0.4 1.5SummaryMinimum -0.2 1.1Maximum 0.8 2.6Median 0.3 1.7Consensus 0.4 1.7History30 days ago 0.6 1.760 days ago 0.9 1.890 days ago 1.4 1.9Additional ForecastsCentral Bank (Feb. 2015) -0.1 -IMF (Oct. 2014) 1.9 2.0Euro. Comm. (Feb. 2015) 0.8 1.4

22 | Inflation 2015 | Panelist Distribution

Inflation | annual variation of consumer price index in %

-1

0

1

2

3



0

5

10

15

20

25

2000 2005 2010 2015

Czech Republic

Eastern Europe

0

1

2

3



0

2

4

6

8

10

Q1 12 Q1 13 Q1 14 Q1 15 Q1 16

Czech Republic

Eastern Europe



April 2015

0%

20%

40%

60%

80%

100%

< 0.00 0.05 0.10 0.15 0.20 0.25 0.30 0.35 > 0.35

Monetary Sector | Interest Rate

23 | Interest Rate | 2000 - 2019 | in %

25 | Int. Rate 2015 | evolution of fcst

24 | Interest Rate | Q1 12-Q4 16 | in %


Notes and sources

Long-term chart period from 2000 to 2019 unless otherwise stated. All monetary sector data are from the Czech National Bank (CNB). Forecasts are based on FocusEconomics Consensus Forecast.23 Interest rate, Central Bank 2-Week Repo Rate in % (eop).24 Quarterly interest rate, Central Bank 2-Week Repo Rate in % (eop).25 Interest rate, evolution of 2015 forecasts during the last 18 months.26 Interest rate, evolution of 2016 forecasts during the last 18 months.27 Interest rate, panelist distribution of 2015 forecasts. Concentration of panelists in forecast

interval in %. Higher columns with darker colors represent a larger number of panelists.

Individual Forecasts 2015 2016BofA Merrill Lynch 0.05 0.25Capital Economics 0.05 0.25Citigroup Global Mkts 0.05 0.05Credit Agricole 0.05 0.25Credit Suisse 0.05 0.05CSOB / Patria Finance 0.05 0.05Danske Bank 0.05 -DekaBank 0.05 0.05Deutsche Bank 0.05 0.25EIU - -Erste Bank - -Experian - -Frontier Strategy Group - -Goldman Sachs 0.05 0.05HSBC 0.05 0.05ING 0.05 0.05J&T Banka 0.05 0.05JPMorgan 0.05 0.05Komerční Banka 0.05 0.75Nomura 0.05 0.75Oxford Economics - -Raiffeisen Research 0.05 0.10UBS 0.05 0.05UniCredit 0.05 0.05WIIW - -SummaryMinimum 0.05 0.05Maximum 0.05 0.75Median 0.05 0.05Consensus 0.05 0.18History30 days ago 0.05 0.2660 days ago 0.05 0.3890 days ago 0.05 0.43

27 | Interest Rate 2015 | Panelist Distribution

Interest Rate | 2-Week Repurchase Rate

0.0

0.5

1.0

1.5

2.0



0

10

20

30

40

2000 2005 2010 2015

Czech Republic

Eastern Europe

0

1

2

3



0

4

8

12

Q1 12 Q1 13 Q1 14 Q1 15 Q1 16

Czech Republic

Eastern Europe



April 2015

0%

20%

40%

60%

< 26.4 26.8 27.2 27.6 28.0 28.4 28.8 29.2 > 29.2

Monetary Sector | Exchange Rate

28 | Exchange Rate | CZK per EUR

30 | CZK per EUR 2015 | evol. of fcst

29 | Exchange Rate | CZK per EUR

31 | CZK per EUR 2016 | evol. of fcst

Notes and sources

Long-term chart period from 2000 to 2019 unless otherwise stated. All monetary sector data are from Thomson Reuters. Forecasts based on FocusEconomics Consensus Forecast.28 Exchange rate, CZK per EUR (eop).29 Quarterly exchange rate, CZK per EUR (eop).30 Exchange rate, evolution of 2015 forecast during the last 18 months.31 Exchange rate, evolution of 2016 forecast during the last 18 months.32 Exchange rate, panelist distribution of 2015 forecasts. Concentration of panelists in forecast


Individual Forecasts 2015 2016BofA Merrill Lynch 27.1 28.0Capital Economics 29.0 29.0Citigroup Global Mkts 27.6 27.1Credit Agricole 27.5 27.5Credit Suisse 27.5 27.5CSOB / Patria Finance 27.5 26.5Danske Bank 27.5 -DekaBank 27.4 27.0Deutsche Bank 27.5 26.0EIU - -Erste Bank - -Experian - -Frontier Strategy Group - -Goldman Sachs 30.0 28.0HSBC 27.0 27.0ING 27.0 25.0J&T Banka 27.5 27.3JPMorgan 27.2 -Komerční Banka 27.3 26.7Nomura 27.1 26.5Oxford Economics 28.4 28.3Raiffeisen Research 27.6 26.6UBS 27.0 26.5UniCredit 27.5 27.3WIIW 27.5 27.0SummaryMinimum 27.0 25.0Maximum 30.0 29.0Median 27.5 27.0Consensus 27.6 27.1History30 days ago 27.6 27.160 days ago 27.6 26.990 days ago 27.4 26.7

32 | CZK per EUR 2015 | Panelist Distribution

Exchange Rate | CZK per EUR

22

24

26

28

30

32



25

27

29

31

33

35

2000 2005 2010 2015

23

25

27

29

31



24

25

26

27

28

Q1 12 Q1 13 Q1 14 Q1 15 Q1 16



April 2015

External Sector | Current Account and Trade Balance

7

8

9

10

11


2015 2016

36 | Trade Balance | evol. of forecasts

-60

0

60

120

180

2000 2005 2010 2015

Trade BalanceExportsImports

35 | Trade Balance | EUR bn

-6

-4

-2

0

2

4

2000 2005 2010 2015



-2.0

-1.5

-1.0

-0.5

0.0

0.5


2015 2016


Current Account and Trade Balance

Individual Forecasts 2015 2016 2015 2016BofA Merrill Lynch 1.6 1.3 - -Capital Economics 0.3 0.0 - -Citigroup Global Mkts 0.2 -0.5 10.5 7.4Credit Agricole 0.3 0.5 - -Credit Suisse - - - -CSOB / Patria Finance 1.8 1.7 - -Danske Bank -0.5 -0.5 - -DekaBank -0.9 -1.2 - -Deutsche Bank -0.8 -0.6 9.8 10.1EIU 0.2 -0.6 - -Erste Bank 1.1 1.5 - -Experian -1.1 -0.9 - -Frontier Strategy Group - - - -Goldman Sachs -1.0 -1.2 - -HSBC 0.0 0.4 11.2 10.6ING - - - -J&T Banka 0.2 -0.4 8.7 -JPMorgan 0.6 0.4 - -Komerční Banka -0.3 -0.8 9.2 8.6Nomura - - - -Oxford Economics -0.5 -2.2 10.2 10.7Raiffeisen Research 0.6 0.6 6.5 7.3UBS 1.7 1.6 - -UniCredit 0.1 0.2 - -WIIW -1.0 -1.2 10.0 10.0SummaryMinimum -1.1 -2.2 6.5 7.3Maximum 1.8 1.7 11.2 10.7Median 0.2 -0.4 9.9 10.0Consensus 0.1 -0.1 9.5 9.3History30 days ago 0.0 -0.2 9.3 8.960 days ago -0.3 -0.4 9.7 9.490 days ago -0.7 -0.7 8.7 10.4

Current Account Trade Balance% of GDP EUR bn

Notes and sources

Long-term chart period from 2000 to 2019 unless otherwise stated. All external sector data are from the Czech National Bank (CNB). Forecasts based on FocusEconomics Consensus Forecast.33 Current account balance, as % of GDP. 34 Current account balance, evolution of 2015 and 2016 forecasts during the last 18 months.35 Trade balance, exports and imports, in EUR. 36 Trade balance, evolution of 2015 and 2016 forecasts during the last 18 months.



April 2015

External Sector | Exports and Imports

Exports and Imports

Individual Forecasts 2015 2016 2015 2016BofA Merrill Lynch - - - -Capital Economics - - - -Citigroup Global Mkts 120 129 109 122Credit Agricole - - - -Credit Suisse - - - -CSOB / Patria Finance - - - -Danske Bank - - - -DekaBank - - - -Deutsche Bank 146 149 136 139EIU - - - -Erste Bank - - - -Experian - - - -Frontier Strategy Group - - - -Goldman Sachs - - - -HSBC 128 140 117 130ING - - - -J&T Banka - - - -JPMorgan - - - -Komerční Banka 118 130 109 121Nomura - - - -Oxford Economics 101 108 90 97Raiffeisen Research 125 137 118 127UBS - - - -UniCredit - - - -WIIW 116 122 106 112SummaryMinimum 101 108 90 97Maximum 146 149 136 139Median 120 130 109 122Consensus 122 131 112 121History30 days ago 117 128 108 11960 days ago 121 132 110 12290 days ago 123 133 114 123

Exports ImportsEUR bn EUR bn

Notes and sources

Long-term chart period from 2000 to 2019 unless otherwise stated. All external sector data are from the Czech National Bank (CNB). Forecasts based on FocusEconomics Consensus Forecast.37 Exports, annual variation in %. 38 Exports, evolution of 2015 and 2016 forecasts during the last 18 months.39 Imports, annual variation in %. 40 Imports, evolution of 2015 and 2016 forecasts during the last 18 months.

100

110

120

130


2015 2016

40 | Imports | evol. of forecasts

-30

-10

10

30

50

2000 2005 2010 2015


39 | Imports | variation in %

-40

-20

0

20

40

2000 2005 2010 2015

Czech Republic

Eastern Europe

37 | Exports | variation in %

110

120

130

140


2015 2016

38 | Exports | evolution of fcst



April 2015

External Sector | Additional forecasts

80

90

100

110

120


2015 2016

44 | External Debt | evol. of forecasts

20

30

40

50

60

70

2000 2005 2010 2015

Czech Republic

Eastern Europe

43 | External Debt | % of GDP

3

5

7

9

11

2000 2005 2010 2015

Czech Republic

Eastern Europe

41 | Int. Reserves | months of imports

35

40

45

50


2015 2016

42 | Int. Reserves | evolution of fcst

International Reserves and External Debt

Individual Forecasts 2015 2016 2015 2016BofA Merrill Lynch - - - -Capital Economics - - - -Citigroup Global Mkts 42.0 44.4 98.5 108.5Credit Agricole - - - -Credit Suisse 41.4 41.4 - -CSOB / Patria Finance 48.7 51.7 111.1 109.5Danske Bank - - - -DekaBank - - - -Deutsche Bank - - - -EIU - - - -Erste Bank - - - -Experian - - - -Frontier Strategy Group - - - -Goldman Sachs - - - -HSBC 44.6 48.4 116.7 -ING - - - -J&T Banka - - - -JPMorgan - - - -Komerční Banka - - - -Nomura 45.0 44.5 - -Oxford Economics 38.0 42.2 101.7 106.5Raiffeisen Research 46.2 48.0 105.3 109.9UBS - - - -UniCredit 50.0 50.0 110.9 119.0WIIW 46.0 48.0 104.0 106.0SummaryMinimum 38.0 41.4 98.5 106.0Maximum 50.0 51.7 116.7 119.0Median 45.0 48.0 105.3 109.0Consensus 44.7 46.5 106.9 109.9History30 days ago 44.4 45.5 108.3 111.660 days ago 44.7 45.4 108.3 111.690 days ago 45.9 46.4 94.7 104.5

Int. Reserves External DebtEUR bn EUR bn

Notes and sources

Long-term chart period from 2000 to 2019 unless otherwise stated. All external sector data are from the Czech National Bank (CNB). Forecasts are based on FocusEconomics Consensus Forecast.41 International reserves, months of imports. 42 International reserves, evolution of 2015 and 2016 forecasts during the last 18 months.43 External debt as % of GDP.44 External debt, evolution of 2015 and 2016 forecasts during the last 18 months.



April 2015

Czech Republic in the Region


Fact Sheet

Czech Republic

4.7%

Russia 46.3%

Turkey 18.4%

Poland 12.6%

Romania 4.6%

Other13.4%

Czech Republic

2.9%

Russia 38.9%

Turkey 20.9%

Ukraine 12.3%

Poland 10.4%

Other14.6%

Russia5.2%

Other EU-27

24.6%

Germany29.5%

Poland7.7%

Slovakia7.4%

China6.3%

Other19.2%Other EU-

2730.0%

Germany31.8%

Slovakia9.1%

Poland6.2%

Other23.0%

Other6.3%


Mineral Fuels9.9%

Food5.7%Other

12.5%


Trade Structure



Economic Structure


Exports

Exports

Imports

Imports

General Data


Political Data



• Highly educated work force • Ageing population

. .

• European Union membership mitigates external shocks

• FDI supports high value-added exports

• Infrastructure behind its western peers

• Economy dependent on European demand

Energy (2012) Primary Energy Production (trillion Btu): 1,064Primary Energy Consumption (trillion Btu): 1,572Electricity Generation (billion kW-h): 81.9Electricity Consumption (billion kW-h): 60.5Oil Supply (thousand bpd): 10.0Oil Consumption (thousand bpd): 194CO2 Emmissions (million metric tons): 91.2

Agency Rating OutlookMoody’s: A1 StableS&P: AA- StableFitch Ratings: A+ Stable


Transportation (2013) Airports: 128Railways (km): 9,469Roadways (km): 130,671Waterways (km): 664Chief Ports: Děčín, Prague

Official name: Czech RepublicCapital: Prague (2.5m)Other cities: Brno (1.2m)

Ostrava (1.2m)Area (km2): 78,867Population (million, 2014 est.): 10.5Population density (per km2, 2014): 134Population growth rate (%, 2014 est.): 0.2Life expectancy (years, 2014 est.): 78.3Illiteracy rate (%, 2011): 1.0Language: CzechMeasures: Metric systemTime: GMT+1

Prime Minister: Bohuslav SobotkaLast elections: 25-26 October 2013Next elections: 2017Central Bank President: Miroslav Singer

0

20

40

60

80

1002004-06 2007-09 2010-12

Net Exports

Investment


PrivateConsumption

0

20

40

60

80

1002002-04 2005-07 2008-10

Agriculture

Manufacturing

Other Industry

Services

FOCUSECONOMICS Estonia


April 2015

Estonia

REAL SECTOR | GDP accelerates in Q4; posts moderate growth in full year 2014GDP increased 3.0% in Q4 over the same period of the previous year according to the revised data Statistics Estonia (SE) published on 11 March. The reading was revised up a notch from the 2.7% expansion reported in the flash estimate and represented an acceleration over the 2.4% increase recorded in Q3. Q4’s expansion, which was the strongest since Q1 2013, was mainly driven by an acceleration in private consumption and government spending. Investment also improved somewhat compared to the strong contraction tallied in the previous quarter.

On the domestic side, growth in private consumption increased 5.8% in Q4, which represented an improvement compared to the 5.2% tallied in Q3. Government consumption accelerated from a 2.9% increase in Q3 to a significant 5.3% expansion in Q4, which marked the highest result since Q2 2008. Meanwhile, gross fixed investment declined 7.1% in Q4, which was a less pronounced contraction than the 9.8% fall observed in Q3.

Outlook stable


Eric DenisEconomist

Estonia

2011-13 2014-16 2017-19Population (million): 1.3 1.3 1.3GDP (EUR bn): 17.6 20.2 23.6GDP per capita (EUR): 13,280 15,128 17,702GDP growth (%): 4.8 2.3 3.6Fiscal Balance (% of GDP): 0.1 -0.3 0.2Public Debt (% of GDP): 8.6 9.9 8.8Inflation (%): 4.2 0.9 2.5Current Account (% of GDP): -0.8 -1.0 -1.8

Estonia’s economy expanded 3.0% in Q4 2014, mainly driven by an acceleration in private consumption and government spending. Q4’s reading was the strongest since Q1 2013. Momentum seems to have been carried over in the first quarter of this year, as industrial production accelerated in February. Meanwhile, in the political arena, Prime Minister Taavi Roivas’ Reform Party allied with the leftist Social Democrats and the conservative Pro Patria-Res Publica Union (IRL) party. The new three-party coalition is comprised exclusively of pro-Western parties. The elections were characterized by rampant tensions between pro-Russian and pro-Western parties; a quarter of Estonia’s population is of Russian ethnicity and fears of increased pressure from Moscow reached a new peak.

Estonia is expected to post healthy growth this year, although geopolitical tensions between the European Union and Russia will continue to create uncertainty in various sectors of the economy. Domestic demand will continue to be the main driver of the economy this year, supported by increased wages and historically-low energy prices. FocusEconomics panelists see GDP expanding 2.0% in 2015, which is unchanged from last month’s forecast. The panel expects GDP growth to accelerate to 2.7% in 2016.

Harmonized consumer prices declined 0.2% annually in February (January: -0.5% year-on-year). FocusEconomics Consensus Forecast panelists expect HICP inflation to pick up both this year and the next, averaging 0.5% in 2015 and 1.9% in 2016.

Gross Domestic Product | variation in %

Note: Year-on-year changes of GDP in %.Source: Statistics Estonia and FocusEconomics Consensus Forecast.

0

4

8

12

Q1 2011 Q1 2012 Q1 2013 Q1 2014 Q1 2015

%



April 2015

On the external side, exports of goods and services jumped from a 4.8% increase in Q3 to a 6.0% expansion in Q4, which marked the highest reading in six quarters. Meanwhile, import growth jumped from Q3’s 2.9% to 5.9% in Q4. Since imports accelerated more than exports, the external sector’s net contribution to overall economic growth decreased from 1.7 percentage points in Q3 to 0.1 percentage points in Q4.

In seasonally- and working-day adjusted terms, GDP increased 1.1% quarter-on-quarter in Q4, which was notably above the mild 0.2% expansion tallied in the third quarter. In the full year 2014, GDP expanded 2.1%, which represented an improvement compared to the 1.6% increase registered in 2013, but was still far below the results in the three prior years.

The Central Bank expects GDP growth to reach 2.1% in 2015 and 3.3% in 2016. FocusEconomics Consensus Forecast participants see the economy growing 2.0% in 2015, which is unchanged from last month’s estimate. In 2016, economic growth is expected to increase to 2.7%.

REAL SECTOR | Industrial production accelerates in FebruaryIn February, industrial production increased a working-day adjusted 5.0% over the same month of last year, which came in well above the mild 1.9% rise tallied in January. According to Statistics Estonia, February’s solid expansion reflected improvements in the manufacturing and energy sectors. Conversely, production in the mining sector declined compared to the same month of the previous year.

A month-on-month assessment shows that industrial output rebounded from a 2.7% drop in January to a 1.6% rise in February, which marked a seven-month-high. As a result of the notable increase, the overall trend continued to improve in February, with annual average growth in industrial production rising to 3.2% from January’s 2.8%.

FocusEconomics Consensus Forecast panelists foresee industrial production growing 3.4% in 2015, which is unchanged from the previous month’s projection. In 2016, the panel expects industrial production to increase 3.8%.

MONETARY SECTOR | Consumer prices decline in annual terms again in MarchConsumer prices increased 0.6% over the previous month in March, which mirrored February’s print. According to Statistics Estonia, the result mainly reflected higher prices for motor fuels, as well as for clothing and transport. Conversely, prices for housing and for household goods were lower compared to the previous month.

Consumer prices decreased 0.6% compared to the same month last year in March, which was a less pronounced decline than the 0.8% drop tallied in the previous month. Meanwhile, annual HICP inflation rose from a 0.5% annual decline in January to a 0.2% decline in February (the last month for which data are available). Annual average HICP inflation ticked down from January’s 0.3% to 0.2% in February.

FocusEconomics Consensus Forecast panelists expect harmonized inflation to average 0.5% in 2015, which is down 0.3 percentage points from last month’s forecast. In 2016, the panel expects average inflation to accelerate to 1.9%.


Note: Year-on-year changes and annual average growth of industrial production index in %.Source: Statistics Estonia and FocusEconomics calculations.

-8

-4

0

4

8

12



%


Note: Year-on-year and month-on-month variation of consumer price index in %.Source: Statistics Estonia.

-2.0

0.0

2.0

4.0

6.0

-0.8

-0.4

0.0

0.4

0.8




%%



April 2015


Annual Data 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019Real Sector Population (million) 1.3 1.3 1.3 1.3 1.3 1.3 1.3 1.3 1.3 1.3GDP per capita (USD) 14,637 17,171 17,112 18,854 19,461 16,045 16,600 18,286 20,311 22,340GDP (USD bn) 19.5 22.8 22.7 24.9 25.9 21.4 22.1 24.3 27.0 29.7GDP per capita (EUR) 11,035 12,334 13,311 14,196 14,648 15,022 15,714 16,640 17,662 18,802GDP (EUR bn) 14.7 16.4 17.6 18.7 19.5 20.0 20.9 22.1 23.5 25.0Economic Growth (Nom. GDP, ann. var. in %) 4.0 11.5 7.5 6.2 4.2 2.5 4.6 5.8 6.1 6.4Economic Growth (GDP, annual var. in %) 2.5 8.3 4.7 1.6 2.1 2.0 2.7 3.4 3.6 3.7Private Consumption (annual var. in %) -1.6 2.5 5.1 3.8 4.6 3.5 3.5 3.8 4.0 4.1Government Consumption (ann. var. in %) -0.4 1.7 3.3 2.8 2.3 - - - - -Fixed Investment (annual var. in %) -2.6 32.7 10.9 2.2 -2.8 1.5 3.9 5.2 5.3 5.6Industrial Production (annual var. in %) 22.9 19.7 1.5 4.1 2.4 3.4 3.8 4.3 4.4 4.7Retail Sales (annual variation in %) -3.2 5.8 7.7 5.2 6.7 3.3 3.9 4.0 4.3 4.6Unemployment (% of active population, aop) 16.7 12.3 10.0 8.6 7.3 6.8 6.3 5.9 5.9 5.9Fiscal Balance (% of GDP) 0.2 1.0 -0.3 -0.5 -0.2 -0.5 -0.4 0.0 0.2 0.4Public Debt (% of GDP) 6.5 6.0 9.7 10.1 10.1 9.9 9.7 9.3 8.8 8.2Monetary and Financial Sector Money (annual variation of M2 in %) 3.0 6.9 7.1 6.7 9.9 - - - - -Inflation (CPI, annual variation in %, eop) 5.7 3.7 3.5 1.4 -0.5 - - - - -Inflation (HICP, annual variation in %, aop) 2.7 5.1 4.2 3.2 0.5 0.5 1.9 2.4 2.5 2.7Inflation (PPI, annual variation in %, aop) 3.3 4.4 2.3 4.1 -1.6 - - - - -ECB Refinancing Rate (%, eop) 1.00 1.00 0.75 0.25 0.05 0.05 0.05 0.39 0.76 1.543-Month EURIBOR (%, eop) 1.01 1.36 0.19 0.29 0.08 0.03 0.06 0.62 1.00 1.57Exchange Rate (USD per EUR, eop) 1.34 1.30 1.32 1.38 1.21 1.04 1.07 1.13 1.17 1.20Exchange Rate (USD per EUR, aop) 1.33 1.39 1.29 1.33 1.33 1.07 1.06 1.10 1.15 1.19External Sector Current Account Balance (% of GDP) 1.8 1.4 -2.5 -1.1 -0.1 -1.3 -1.6 -1.8 -1.8 -1.8Current Account Balance (EUR bn) 0.3 0.2 -0.4 -0.2 0.0 -0.3 -0.3 -0.4 -0.4 -0.4Merchandise Trade Balance (EUR bn) -0.5 -0.7 -1.6 -1.6 -1.7 -1.3 -1.4 -1.3 -1.3 -1.3Merchandise Exports (EUR bn) 8.7 12.0 12.5 12.3 12.1 12.0 12.5 13.0 13.6 14.0Merchandise Imports (EUR bn) 9.3 12.7 14.1 13.9 13.7 13.3 13.9 14.4 14.9 15.3Merchandise Exports (annual variation in %) 34.8 37.3 4.3 -1.8 -1.7 -0.9 4.4 4.2 4.0 3.3Merchandise Imports (annual variation in %) 27.5 37.3 10.8 -1.5 -1.0 -3.5 4.4 3.6 3.5 3.0External Debt (EUR bn) 16.5 16.7 18.0 17.5 19.0 17.8 18.1 18.6 18.9 19.1External Debt (% of GDP) 112.1 101.9 101.9 93.5 97.2 89.0 86.5 84.0 80.2 76.5 Quarterly Data Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16Economic Growth (GDP, annual var. in %) 2.4 3.0 1.8 1.8 1.9 2.0 2.3 2.6 2.7 3.4Economic Growth (GDP, s.a. qoq variation in %) 0.2 1.1 - - - - - - - -Inflation (HICP, annual variation in %, aop) 0.0 0.2 0.5 0.6 0.6 0.6 1.0 1.3 1.7 4.0ECB Refinancing Rate (%, eop) 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.053-Month EURIBOR (%, eop) 0.08 0.08 0.02 0.03 0.03 0.03 0.06 0.06 0.07 0.06Exchange Rate (USD per EUR, eop) 1.26 1.21 1.07 1.05 1.04 1.04 1.05 1.06 1.06 1.07 Monthly Data Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15Industrial Production (annual variation in %) 1.6 2.8 2.9 3.9 2.3 4.6 9.8 1.9 5.0 -Inflation (CPI, mom variation in %) 0.0 -0.2 -0.3 -0.2 0.0 -0.8 0.0 -0.4 0.6 0.6Inflation (CPI, annual variation in %) -0.4 -0.4 -0.7 -0.6 -0.2 -0.6 -0.5 -1.3 -0.8 -0.6Inflation (HICP, annual variation in %) 0.4 0.0 -0.2 0.2 0.5 0.0 0.1 -0.5 -0.2 -Exchange Rate (USD per EUR, eop) 1.37 1.34 1.32 1.26 1.25 1.25 1.21 1.13 1.12 1.07



April 2015


1 | Real GDP | 2000-2019 | var. in %







8 | Fiscal Balance | evolution of fcstNotes and sources

General: Long-term chart period from 2000 to 2019 unless otherwise stated. All real sector data are from the Statistics Estonia (SE) and Eurostat. Forecasts based on FocusEconomics Consensus Forecast. 1 GDP, annual variation in %. Source: SE.2 Quarterly GDP (not seasonally-adjusted), year-on-year variation in %.

Source: SE.3 GDP, evolution of 2015 forecasts during the last 18 months.4 GDP, evolution of 2016 forecasts during the last 18 months.5 Unemployment, % of active population. Source: SE.6 Balance of non-financial public sector as % of GDP. Source: Eurostat.7 Unemployment, evolution of 2015 and 2016 forecasts during the last 18



Individual Forecasts 2015 2016 2015 2016Capital Economics 1.0 2.0 -0.5 -0.5Danske Bank 2.2 2.7 - -DekaBank 2.0 2.7 -0.6 -0.6DNB 2.2 2.8 -0.5 -0.5EIU 2.0 2.8 0.2 0.4JPMorgan 2.4 2.8 -0.5 -0.5Nordea 2.0 3.2 -0.4 -0.4Oxford Economics 2.2 2.8 -0.6 -0.4SEB 2.2 2.7 -1.0 -0.5Swedbank 2.0 2.7 -0.4 -0.2WIIW 2.0 2.5 -0.5 -0.3SummaryMinimum 1.0 2.0 -1.0 -0.6Maximum 2.4 3.2 0.2 0.4Median 2.0 2.7 -0.5 -0.5Consensus 2.0 2.7 -0.5 -0.4History30 days ago 2.0 2.8 -0.5 -0.460 days ago 2.1 2.9 -0.5 -0.390 days ago 2.3 3.0 -0.5 -0.3Additional ForecastsCentral Bank (Dec. 2014) 2.1 3.3 - -IMF (Oct. 2014) 2.5 3.5 - -Euro. Comm. (Feb. 2015) 2.3 2.9 - -


-20

-10

0

10

20

2000 2005 2010 2015

EstoniaEastern EuropeWorld

0

5

10

15

20

2000 2005 2010 2015

Estonia

Eastern Europe

-2

0

2

4

6

Q1 12 Q1 13 Q1 14 Q1 15 Q1 16

EstoniaEastern EuropeWorld

1

2

3

4

5



0

2

4

6



6.0

6.5

7.0

7.5

8.0

8.5


2015 2016

-1.0

-0.5

0.0

0.5

1.0


2015 2016

-10

-5

0

5

2000 2005 2010 2015

Estonia

Eastern Europe



April 2015


9 | Inflation | 2000-2019 | in %



10 | Inflation | Q1 12-Q4 16 | in % Inflation and Current Account Balance



Notes and sources

General: Long-term chart period from 2000 to 2019 unless otherwise stated. All monetary and external sector data are from the Statistics Estonia (SE) and the Bank of Estonia (EP, Eesti Pank). See below for details. Forecasts based on FocusEconomics Consensus Forecast. 9 Inflation, annual average variation of harmonized index of consumer prices (HICP) in %

Source: SE. 10 Inflation, annual variation of quarterly average harmonized index of consumer prices (HICP)

in %. Source: SE. 11 Inflation, evolution of 2015 forecasts during the last 18 months.12 Inflation, evolution of 2016 forecasts during the last 18 months.13 Current account balance as % of GDP. Source: EP.14 Current account balance as % of GDP, evolution of 2015 and 2016 forecasts during the last

18 months.

-20

-10

0

10

2000 2005 2010 2015

Estonia

Eastern Europe

-2.5

-2.0

-1.5

-1.0


2015 2016

0

5

10

15

20

25

2000 2005 2010 2015

EstoniaEastern Europe

0

2

4

6

8

10

Q1 12 Q1 13 Q1 14 Q1 15 Q1 16

EstoniaEastern Europe

-2

0

2

4

6



0

1

2

3

4



Individual Forecasts 2015 2016 2015 2016Capital Economics -0.3 1.3 -2.5 -2.5Danske Bank 0.6 1.7 -2.5 -2.6DekaBank 0.5 1.8 -1.7 -2.1DNB 1.5 1.7 -1.0 -1.5EIU 0.8 2.4 -0.6 -1.1JPMorgan 0.3 0.7 -0.2 -0.5Nordea -0.5 2.2 -0.7 -0.8Oxford Economics 0.5 2.1 -1.5 -1.5SEB 0.5 2.3 -0.8 -1.5Swedbank 0.3 2.6 -0.9 -1.3WIIW 0.8 2.2 -1.5 -2.2SummaryMinimum -0.5 0.7 -2.5 -2.6Maximum 1.5 2.6 -0.2 -0.5Median 0.5 2.1 -1.0 -1.5Consensus 0.5 1.9 -1.3 -1.6History30 days ago 0.8 1.9 -1.6 -1.660 days ago 1.6 2.3 -1.7 -1.990 days ago 1.6 2.3 -1.7 -1.9Additional ForecastsCentral Bank (Dec. 2014) 0.8 2.1 - -IMF (Oct. 2014) 1.5 2.1 - -Euro. Comm. (Feb. 2015) 0.4 1.6

Prices (HICP) Current Accountvariation in % % of GDP



April 2015

Fact Sheet

Estonia in the Region

Population | %-share in Baltics GDP | %-share in Baltics

Estonia24.2%

Lithuania 45.6%

Latvia 30.2%

Estonia21.1%

Lithuania 46.8%

Latvia 32.2%

Other EU-27

37.4%

Finland15.0%

Germany11.0%

Sweden10.8%

Asia ex-Japan5.5%

Other20.3%

Russia12.7%

Other EU-27

21.9%

Sweden16.8%

Finland15.4%

Latvia9.3%

Other24.0%

Other9.2%


Mineral Fuels17.1%

Food10.1%

Other11.5%


Mineral Fuels16.0%

Food9.3%

Trade Structure



Economic Structure


Exports

Exports

Imports

Imports

-20

0

20

40

60

80

100

1202004-06 2007-09 2010-12

Net Exports

Investment


PrivateConsumption

0

20

40

60

80

1002002-04 2005-07 2008-10

Agriculture

Manufacturing

Other Industry

Services

General Data


Political Data



• Small domestic market

• Widespread English proficiency • High external debt• High per capita income • Ageing population

• Commitment to prudent fiscal policy

Energy (2012)Primary Energy Production (trillion Btu): 14Primary Energy Consumption (trillion Btu): 93Electricity Generation (billion kW-h): 11.3Electricity Consumption (billion kW-h): 8.2Oil Supply (thousand bpd): 11.0Oil Consumption (thousand bpd): 28.6CO2 Emmissions (million metric tons): 5.7

Agency Rating OutlookMoody’s: A1 StableS&P: AA- StableFitch Ratings: A+ Stable


Transportation (2013) Airports: 18Railways (km): 1,196Roadways (km): 58,412Waterways (km): 335Chief Ports: Tallinn, Kunda, Pärnu

Official name: Republic of EstoniaCapital: Tallinn (0.5m)Area (km2): 45,228Population (million, 2014 est.): 1.3Population density (per km2, 2014): 29.5Population growth rate (%, 2014 est.): -0.7Life expectancy (years, 2014 est.): 74.1Illiteracy rate (%, 2011): 0.2Language: Estonian, RussianMeasures: Metric systemTime: GMT+2

Prime Minister: Taavi RoivasLast elections: 1 March 2015Next elections: 2019Central Bank President: Ardo Hansson

FOCUSECONOMICS Hungary


April 2015

Hungary

REAL SECTOR | Industrial production growth slows in FebruaryAccording to preliminary data released by the statistical institute (KSH) on 8 April, industrial output in February rose a working-day adjusted 5.8% over the same month of the previous year, marking a deceleration compared to the 7.7% increase observed in January. The print slightly exceeded market expectations of a 5.6% increase.

On a monthly basis, industrial production dropped a seasonally- and working-day adjusted 0.3% in February, contrasting January’s 4.4% expansion. Meanwhile, annual average growth in industrial production moderated from 7.3% in January to 7.1% in February.

FocusEconomics Consensus Forecast panelists expect industrial production to grow 5.1% in 2015, which is down 0.1 percentage points from last month’s projection. For 2016, the panel expects industrial output to expand 5.5%.

The Central Bank expects the economy to expand 2.3% in 2015 and 2.1% in 2016. FocusEconomics Consensus Forecast panelists expect a 2.7%

Outlook improves


2011-13 2014-16 2017-19Population (million): 9.9 9.8 9.8GDP (EUR bn): 100.1 106.7 120.2GDP per capita (EUR): 10,081 10,846 12,293GDP growth (%): 0.6 2.9 2.2Fiscal Balance (% of GDP): -3.4 -2.6 -2.5Public Debt (% of GDP): 78.9 76.4 73.6Inflation (%): 3.8 0.7 2.7Current Account (% of GDP): 2.2 4.1 2.5External Debt (% of GDP): 127 106 94

Hungary

Hungary recorded the largest expansion in eight years in 2014 with the help of strong fiscal and monetary stimulus. More recent indicators suggest that momentum moderated at the outset of this year: industrial production expanded at a slower pace in February and economic sentiment decreased for a fifth consecutive month in March. Last month, Economy Minister Mihály Varga said that the government was examining the possibility of lowering the Value Added Tax (VAT) along with other levies, including banking, corporate and personal income taxes, by 2018. At 27%, Hungary’s VAT is one of the highest in Europe. However, Varga did not outline how the government, which needs to achieve a deficit of below 3% of GDP, would make up for lower tax revenues. In March, Standard & Poor’s raised Hungary’s credit rating from BB to BB+, citing reduced external vulnerability as the main reason for its decision.

Hungary is expected to expand at a slower, but still robust pace this year. FocusEconomics Consensus Forecast panelists project that GDP will increase 2.7% in 2015, which is up 0.1 percentage points from last month’s projection. For 2016, the panel forecasts an expansion of 2.4%.

The fall in consumer prices softened in February, dropping 0.6% in annual terms, which was up from January’s 1.0% decline. On 24 March, the Central Bank cut the base rate from 2.10% to 1.95%. Panelists expect inflation to be flat on average in 2015 and see inflation rising to 2.4% in 2016.



Note: Year-on-year changes and annual average variation of industrial production index in %.Source: Hungarian Central Statistics Office and FocusEconomics calculations.

-5.0

0.0

5.0

10.0

15.0



%



April 2015

expansion in 2015, which is up 0.1 percentage points from last month’s projection. For 2016, the panel expects growth to expand 2.4%.

OUTLOOK | Economic sentiment inches down again in MarchIn March, the GKI-Erste economic sentiment index inched down from February’s minus 3.2 points to minus 3.6 points, representing a fifth consecutive decline and the lowest reading in seven months.

Consumer sentiment fell from minus 22.4 points in February to minus 25.8 points in March. According to GKI, “[a]lthough there has been an almost continuous deterioration in recent months, the mood is still relatively optimistic. Households assessed their future financial situation in the next year and their savings capacity worse than in February, whereas they considered the possibility of purchasing high-value durables more favourable.”

FocusEconomics panelists expect total consumption to expand 2.8% in 2015, which is up 0.3 percentage points from last month’s projection. For 2016, the panel expects total consumption to increase 2.4%.

Conversely, business sentiment improved from 3.5 points in February to 4.2 points in March. According to GKI, the result reflects that expectations improved in the industrial sector, whereas they stagnated in the construction sector and moderated for the trade and services sectors. Regarding the expectations on the general economy, GKI-Erste added that, “the expected position of the Hungarian economy improved slightly with the exception of the service sector. However, it deteriorated somewhat among consumers.”

Panelists expect fixed investment to increase 2.9% in 2015, which is down 0.3 percentage points over last month’s estimate. For 2016, the panel sees investment expanding 1.5%.

MONETARY SECTOR | Drop in consumer prices softens in March In March, consumer prices rose 0.6% over the previous month, coming in marginally above the 0.5% increase observed in February. The figure represented the largest increase since January 2013 and reflected higher prices for several categories of the price index, such as food as well as clothing and footwear.

In annual terms, consumer prices decreased 0.6% in March, which came in above the 1.0% drop observed in the previous month, and represented the smallest decline in five months. As a consequence, inflation remains below the Central Bank’s target of 3.0%, with a tolerance margin of plus/minus 1.0%. Core consumer prices, which exclude volatile items such as fresh food and fuel, rose 0.2% over the previous month, matching February’s result. Meanwhile, annual core inflation remained at February’s 1.0%.

In its March inflation report, the Central Bank projects that inflation will be flat on average in 2015. For 2016, the Bank sees inflation averaging 2.6%. FocusEconomics Consensus Forecast panelists sees inflation to be flat on average in 2015, which is down 0.3 percentage points from last month’s projection. For 2016, the panel expects inflation to rise to 2.4%.

MONETARY SECTOR | Central Bank cuts base rate; leaves door open for further rate cutsThe Central Bank cut the base rate from 2.10% to 1.95% at its 24 March monetary policy meeting as market analysts had expected. In cutting the rate,

GKI-Erste Economic Sentiment Index

Note: Consumer confidence, business confidence and economic sentiment indicators.Source: GKI Economic Research Co.

-60

-40

-20

0

20


Economic sentiment Business confidence

Consumer confidence


Note: Year-on-year and month-on-month variation of consumer price index in %.Source: Hungarian Central Statistics Office.

-2.5

0.0

2.5

5.0

7.5

-1.0

-0.5

0.0

0.5

1.0




%%



April 2015

the Bank resumed the easing cycle that had been interrupted since July of last year. The Bank had lowered the base rate gradually from 7.00% to 2.10% in the months from July 2012 to July 2014.

In the March inflation report, which contained the rate cut decision, the Bank noted that the domestic economy continued to record solid growth in the final quarter of last year and that it is likely to be the main anchor of growth in the next quarters, sustained by increasing real household incomes and employment. The Bank sees investment picking up going forward, resulting from increased economic activity and the Bank’s extended Funding for Growth Scheme. Moreover, the Bank expects exports growth to perform solidly, helped by stronger growth in Hungary’s main export markets.

Regarding price developments, the Central Bank stressed that, “downside risks to inflation increased relative to the December,” inflation report, as the probability had increased that second-round effects of the oil price drop were taking hold. According to the Bank, the real economy will continue to have a disinflationary impact in the next quarters as the negative output gap is expected to close only gradually toward the end of 2016 and this will also contribute to inflationary pressures remaining subdued for a “sustained period”.

The Central Bank left the door open for further rate hikes in stating that, “[c]autious easing of monetary conditions may continue as long as it supports the achievement of the medium-term inflation target.”

Dan Bucşa, Economist at UniCredit Research, commented:

Despite stronger reflation, we expect the NBH to continue with rate cuts. We expect a 15bp cut to 1.80% to be decided at the policy meeting on 21 April, with the policy rate reaching 1.50% before the end of 1H15. The NBH will probably continue to cut in 2H15 as long as market conditions permit, with 20-50bp in cuts possible this year. The NBH’s deputy governor, Ádám Balog, signalled recently that the easing cycle could go below 1.5%. In terms of data flow, the NBH will look at March wage growth and at 1Q15 preliminary GDP figures as the most important data releases for the next two months.

On the same day, but in a separate statement, the Monetary Council announced that it had established a plus/minus 1.0 percentage point tolerance band around its 3.0% inflation target in order to improve the flexibility of its inflation targeting regime. Particularly, the Central Bank noted that its decision to broaden the target range was motivated by the fact that tolerating, “deviations of consumer prices from the inflation target temporarily,” helps to avoid, “excessive volatility of real variables.” The next monetary policy meeting is scheduled for 21 April.

FocusEconomics Consensus Forecast panelists see the base rate at 1.62% by the end of 2015. For 2016, the panel sees the base rate ending the year at 2.37%.

Central Bank Base Rate | in %

Note: Central Bank base rate in %.Source: Hungarian Central Bank (MNB).

0.0

2.0

4.0

6.0

8.0

Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15

%



April 2015


Annual Data 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019Real Sector Population (million) 10.0 10.0 9.9 9.9 9.9 9.8 9.8 9.8 9.8 9.8GDP per capita (USD) 12,741 13,920 12,758 13,531 13,935 11,524 11,878 12,897 14,127 15,259GDP (USD bn) 128 139 127 134 137 113 117 126 138 149GDP (HUF bn) 26,946 28,035 28,549 29,846 31,891 32,735 34,290 36,007 37,751 39,583Economic Growth (Nom. GDP, ann. var. in %) 2.9 4.0 1.8 4.5 6.8 2.6 4.8 5.0 4.8 4.9Economic Growth (GDP, annual var. in %) 0.8 1.8 -1.5 1.5 3.6 2.7 2.4 2.4 2.1 2.0Total Consumption (annual var. in %) -2.1 0.6 -1.7 0.9 1.8 2.8 2.4 2.3 2.1 1.8Private Consumption (annual var. in %) -2.8 0.8 -2.0 0.2 1.6 - - - - -Government Consumption (ann. var. in %) 1.9 -0.3 0.0 5.1 3.4 - - - - -Fixed Investment (annual var. in %) -9.5 -2.2 -4.2 5.2 11.7 2.9 1.5 3.4 3.2 3.0Industrial Production (annual var. in %) 10.3 5.8 -1.3 1.5 7.2 5.1 5.5 4.5 4.3 4.2Retail Sales (annual variation in %) -2.2 0.3 -2.0 1.8 5.0 5.7 4.7 3.5 3.2 3.1Unemployment (% of active population, aop) 11.2 11.1 11.0 10.1 7.7 7.2 6.9 6.6 6.4 6.4Fiscal Balance (% of GDP) -4.5 -5.5 -2.3 -2.4 -2.7 -2.6 -2.5 -2.6 -2.6 -2.4Public Debt (% of GDP) 80.9 81.0 78.5 77.3 77.1 76.4 75.6 74.0 73.2 73.6Monetary and Financial Sector Money (annual variation of M2 in %) 0.0 7.1 -1.2 4.4 9.8 - - - - -Inflation (CPI, annual variation in %, aop) 4.9 3.9 5.7 1.7 -0.2 0.0 2.4 2.7 2.7 2.8Inflation (Core, annual variation in %, aop) 3.0 2.7 5.1 3.3 2.2 - - - - -Inflation (HICP, annual variation in %, aop) 4.7 3.9 5.7 1.7 0.0 - - - - -Inflation (PPI, annual variation in %, eop) 8.1 7.5 -1.9 0.5 0.1 - - - - -Central Bank Base Rate (%, eop) 5.75 7.00 5.75 3.00 2.10 1.62 2.37 3.37 4.09 4.483-Month Interbank Rate (%, eop) 5.85 7.24 5.75 2.99 2.10 1.62 2.33 3.42 4.28 4.7710-Year Bond Yield (%, eop) 7.95 9.75 6.11 5.61 3.60 3.41 4.00 4.79 5.27 5.91Stock Market (BUX Index variation in %) 0.5 -20.4 7.1 2.2 -10.4 - - - - -Exchange Rate (HUF per USD, eop) 208 244 221 216 262 299 291 278 268 263Exchange Rate (HUF per USD, aop) 208 201 225 224 233 289 294 285 273 266Exchange Rate (HUF per EUR, eop) 278 315 291 297 317 311 312 314 314 317Exchange Rate (HUF per EUR, aop) 275 279 289 297 309 308 311 313 314 316External Sector Current Account Balance (% of GDP) 0.3 0.8 1.8 4.0 4.1 4.2 3.9 3.0 2.3 2.1Current Account Balance (EUR bn) 0.3 0.8 1.8 4.1 4.3 4.5 4.3 3.4 2.8 2.7Merchandise Trade Balance (EUR bn) 5.5 7.1 6.7 6.6 6.4 6.5 6.9 6.9 7.2 7.3Merchandise Exports (EUR bn) 71.4 80.0 80.0 81.3 84.7 88.2 91.9 96.2 101.4 107.8Merchandise Imports (EUR bn) 65.9 72.9 73.3 74.7 78.3 81.7 85.0 89.2 94.2 100.5Merchandise Exports (annual variation in %) 20.8 11.9 0.0 1.7 4.2 4.1 4.2 4.6 5.5 6.2Merchandise Imports (annual variation in %) 19.0 10.6 0.5 2.0 4.7 4.3 4.1 5.0 5.6 6.6International Reserves (EUR bn) 33.7 37.8 33.9 33.8 34.6 37.4 38.5 43.0 48.6 51.2International Reserves (months of imports) 6.1 6.2 5.5 5.4 5.3 5.5 5.4 5.8 6.2 6.1External Debt (EUR bn) 141 135 127 120 118 111 109 112 113 114External Debt (% of GDP) 144 136 128 118 115 105 98 98 94 91 Quarterly Data Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16Economic Growth (GDP, annual var. in %) 3.3 3.4 2.9 2.7 2.6 2.5 2.4 2.4 2.4 2.3Economic Growth (GDP, qoq variation in %) 0.4 0.8 - - - - - - - -Inflation (CPI, annual variation in %, aop) -0.1 -0.7 -1.0 0.0 0.2 1.2 2.3 2.5 2.5 2.5Central Bank Base Rate (%, eop) 2.10 2.10 1.95 1.68 1.68 1.62 1.73 1.91 2.15 2.373-Month Interbank Rate (%, eop) 2.09 2.10 1.89 1.69 1.64 1.62 1.78 1.91 2.06 2.3310-Year Bond Yield (%, eop) 4.63 3.60 3.28 3.32 3.38 3.41 3.67 3.89 3.90 4.00Exchange Rate (HUF per USD, eop) 246 262 280 292 299 299 295 294 292 291Exchange Rate (HUF per EUR, eop) 311 317 300 308 310 311 310 310 311 312 Monthly Data Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15Industrial Production (annual var. in %) 11.4 12.2 2.8 5.5 1.5 5.6 4.7 7.7 5.8 -Unemployment (% of active population) 8.0 7.7 7.4 7.1 7.2 7.1 7.4 7.7 - -GKI-Erste Economic Sentiment -1.0 -3.9 -4.1 -2.3 1.2 0.7 0.2 -2.9 -3.2 -3.6GKI-Erste Consumer Confidence -19.3 -18.9 -21.9 -19.1 -17.6 -19.4 -22.1 -23.8 -22.4 -25.8GKI-Erste Business Confidence 5.4 1.4 2.2 3.6 7.8 7.7 8.1 4.4 3.5 4.2Inflation (CPI, mom variation in %) 0.1 0.2 -0.2 -0.2 -0.3 -0.4 -0.7 -0.2 0.5 0.6Inflation (CPI, annual variation in %) -0.3 0.1 0.2 -0.5 -0.4 -0.7 -0.9 -1.4 -1.0 -0.6Exchange Rate (HUF per USD, eop) 226 234 240 246 246 246 262 275 271 280Exchange Rate (HUF per EUR, eop) 310 314 315 311 308 307 317 310 303 300Merchandise Exports (annual variation in %) 6.3 9.7 -2.0 6.0 -2.1 3.4 9.0 3.7 7.4 -



April 2015

0%

10%

20%

30%

40%

50%

< 1.4 1.8 2.2 2.6 3.0 3.4 3.8 4.2 > 4.2


1 | Real GDP | 2000-2019 | var. in %




Notes and sources

Long-term chart period from 2000 to 2019 unless otherwise stated. All real sector data are from the Hungarian Central Statistics Office (KSH, Kozponti Statisztikai Hivatal). Forecasts are based on FocusEconomics Consensus Forecast.1 GDP, real annual variation in %. 2 Quarterly GDP (not seasonally adjusted), year-on-year variation in %.3 GDP, evolution of 2015 forecasts during the last 18 months.4 GDP, evolution of 2016 forecasts during the last 18 months.5 GDP, panelist distribution of 2015 forecasts. Concentration of panelists in forecast interval in


Individual Forecasts 2015 2016BofA Merrill Lynch 3.9 2.9Capital Economics 2.3 2.3Citigroup Global Mkts 2.7 2.1Concorde Securities 2.5 2.0Credit Agricole 2.4 2.4Credit Suisse 2.0 1.9Danske Bank 4.0 3.3Deutsche Bank 2.7 2.4EIU 2.4 2.6Erste Bank 2.5 2.2Experian 2.9 3.4Frontier Strategy Group 2.6 2.3GKI Economic Research 2.0 -Goldman Sachs 2.8 3.1HSBC 2.4 2.0ING 2.8 2.1JPMorgan 2.8 2.5KBC 2.4 2.5Kopint-Tárki 3.0 2.1MKB Bank 2.6 1.7Nomura 2.8 2.2OTP Bank 2.6 2.1Oxford Economics 2.6 2.5Raiffeisen Research 2.5 2.5UBS 2.4 2.4UniCredit 2.6 2.4SummaryMinimum 2.0 1.7Maximum 4.0 3.4Median 2.6 2.4Consensus 2.7 2.4History30 days ago 2.6 2.460 days ago 2.5 2.490 days ago 2.4 2.4Additional ForecastsCentral Bank (Mar. 2015) 3.2 2.5IMF (Oct. 2014) 2.3 1.8European Commission (Feb. 2015) 2.4 1.9

-10

-5

0

5

10

2000 2005 2010 2015

HungaryEastern EuropeWorld

-4

-2

0

2

4

6

Q1 12 Q1 13 Q1 14 Q1 15 Q1 16

HungaryEastern EuropeWorld

1

2

3

4



0

1

2

3

4

5






April 2015



1.5

2.0

2.5

3.0

3.5


2015 2016


-20

-10

0

10

20

2000 2005 2010 2015



1.0

1.5

2.0

2.5

3.0


2015 2016


-5

0

5

10

2000 2005 2010 2015

Hungary

Eastern Europe

Individual Forecasts 2015 2016 2015 2016BofA Merrill Lynch - - - -Capital Economics 2.5 2.5 3.0 3.0Citigroup Global Mkts 2.8 2.6 3.5 -1.5Concorde Securities 2.5 2.5 3.0 1.0Credit Agricole - - - -Credit Suisse 2.4 1.4 3.2 1.3Danske Bank 3.9 3.4 6.6 3.5Deutsche Bank 3.4 2.7 - -EIU 2.2 1.2 2.0 2.8Erste Bank - - - -Experian 2.3 2.9 3.7 4.3Frontier Strategy Group 2.3 2.8 - -GKI Economic Research 2.5 - 0.0 -Goldman Sachs - - - -HSBC 3.2 2.1 5.2 2.5ING - - - -JPMorgan - - - -KBC - - - -Kopint-Tárki 3.0 2.6 3.5 1.0MKB Bank 3.1 2.5 3.5 -2.6Nomura - - - -OTP Bank 2.0 2.0 -1.1 -1.5Oxford Economics 3.2 3.1 2.8 3.1Raiffeisen Research 2.3 2.0 1.5 0.5UBS 3.0 2.0 2.5 3.0UniCredit 3.0 2.4 3.1 2.6SummaryMinimum 2.0 1.2 -1.1 -2.6Maximum 3.9 3.4 6.6 4.3Median 2.7 2.5 3.1 2.5Consensus 2.8 2.4 2.9 1.5History30 days ago 2.5 2.2 3.2 1.960 days ago 2.5 2.2 3.1 2.390 days ago 2.3 2.1 2.9 2.8

Consumption Investmentvariation in % variation in %

Notes and sources

Long-term chart period from 2000 to 2019 unless otherwise stated. All real sector data are from Hungarian Central Statistics Office (KSH, Kozponti Statisztikai Hivatal). Forecasts are based on FocusEconomics Consensus Forecast.6 Total consumption, annual variation in %. 7 Total consumption, evolution of 2015 and 2016 forecasts during the last 18 months.8 Gross fixed investment, annual variation in %.9 Gross fixed investment, evolution of 2015 and 2016 forecasts during the last 18 months.




April 2015


Individual Forecasts 2015 2016 2015 2016BofA Merrill Lynch - - - -Capital Economics 6.0 8.0 8.0 8.0Citigroup Global Mkts - - 6.8 6.5Concorde Securities 4.0 5.0 7.5 7.0Credit Agricole - - - -Credit Suisse - - - -Danske Bank - - - -Deutsche Bank 7.0 6.0 7.6 7.2EIU 4.5 5.8 6.9 6.6Erste Bank - - 7.4 7.2Experian - - 7.2 7.1Frontier Strategy Group 5.0 6.0 6.9 7.0GKI Economic Research 5.0 - 7.4 -Goldman Sachs - - - -HSBC 3.9 6.0 7.3 7.2ING - - - -JPMorgan - - - -KBC - - - -Kopint-Tárki 6.0 5.0 7.2 6.9MKB Bank 4.4 3.2 6.6 5.7Nomura - - - -OTP Bank - - - -Oxford Economics 4.2 3.6 6.9 6.9Raiffeisen Research 5.0 4.5 7.1 6.6UBS 6.0 7.5 6.8 6.8UniCredit - - 7.2 7.1SummaryMinimum 3.9 3.2 6.6 5.7Maximum 7.0 8.0 8.0 8.0Median 5.0 5.8 7.2 7.0Consensus 5.1 5.5 7.2 6.9History30 days ago 5.2 5.5 7.2 7.160 days ago 5.3 5.5 7.2 7.090 days ago 5.6 5.8 7.5 7.3

Industry Unemploymentvariation in % % of active pop.

Notes and sources

Long-term chart period from 2000 to 2019 unless otherwise stated. All real sector data are from the Hungarian Central Statistics Office (KSH, Kozponti Statisztikai Hivatal). Forecasts are based on FocusEconomics Consensus Forecast.10 Industrial production, annual variation in %.11 Industrial production, evolution of 2015 and 2016 forecasts during the last 18 months.12 Unemployment, % of active population.13 Unemployment, evolution of 2015 and 2016 forecasts during the last 18 months.


-20

-10

0

10

20

2000 2005 2010 2015



4.0

4.5

5.0

5.5

6.0


2015 2016


4

6

8

10

12

2000 2005 2010 2015



6

7

8

9

10

11


2015 2016



April 2015


75

76

77

78

79

80


2015 2016


20

40

60

80

100

2000 2005 2010 2015



-10

-5

0

5

2000 2005 2010 2015

Hungary

Eastern Europe


-3.0

-2.9

-2.8

-2.7

-2.6

-2.5


2015 2016



Individual Forecasts 2015 2016 2015 2016BofA Merrill Lynch -2.1 -1.8 73.2 71.6Capital Economics -2.5 -2.5 79.0 78.0Citigroup Global Mkts -2.4 -2.1 76.1 74.7Concorde Securities -2.4 -2.5 75.5 74.6Credit Agricole - - - -Credit Suisse -3.0 -3.0 74.2 73.7Danske Bank - - - -Deutsche Bank -2.7 -2.4 77.0 77.0EIU -2.6 -2.6 76.2 75.1Erste Bank -2.5 -2.5 76.5 75.3Experian -3.0 -3.0 - -Frontier Strategy Group - - - -GKI Economic Research -2.2 - - -Goldman Sachs -2.8 -2.9 - -HSBC -2.4 -2.5 76.6 76.1ING - - 78.5 -JPMorgan -2.4 -2.5 76.5 75.5KBC - - - -Kopint-Tárki -2.4 -2.4 77.5 77.0MKB Bank -2.5 -2.7 75.6 75.2Nomura -3.0 -2.8 78.6 78.9OTP Bank -2.4 -1.8 76.3 75.4Oxford Economics -2.7 -2.4 73.7 73.3Raiffeisen Research -2.8 -2.8 75.0 73.8UBS -2.5 -2.3 78.0 76.5UniCredit -2.7 -2.9 77.5 78.3SummaryMinimum -3.0 -3.0 73.2 71.6Maximum -2.1 -1.8 79.0 78.9Median -2.5 -2.5 76.5 75.3Consensus -2.6 -2.5 76.4 75.6History30 days ago -2.6 -2.6 77.3 76.760 days ago -2.7 -2.6 77.4 76.990 days ago -2.7 -2.6 77.8 77.1


Notes and sources




April 2015

0%

10%

20%

30%

40%

50%

< -1.5 -1.0 -0.5 0.0 0.5 1.0 1.5 2.0 > 2.0


18 | Inflation | 2000 - 2019 | in %


19 | Inflation | Q1 12-Q4 16 | in %


Notes and sources

Long-term chart period from 2000 to 2019 unless otherwise stated. All monetary sector data are from the Hungarian Central Statistics Office (KSH, Kozponti Statisztikai Hivatal). Forecasts are based on FocusEconomics Consensus Forecast.18 Inflation, annual variation of consumer price index (CPI) in % (aop).19 Quarterly inflation, annual variation of consumer price index (CPI) in % (aop).20 Inflation, evolution of 2015 forecasts during the last 18 months.21 Inflation, evolution of 2016 forecasts during the last 18 months.22 Inflation, panelist distribution of 2015 forecasts. Concentration of panelists in forecast interval


Individual Forecasts 2015 2016BofA Merrill Lynch -0.6 1.4Capital Economics -0.7 1.8Citigroup Global Mkts -0.7 2.0Concorde Securities 0.1 2.0Credit Agricole 0.7 2.5Credit Suisse - -Danske Bank 0.5 3.2Deutsche Bank -0.3 2.5EIU 0.2 2.3Erste Bank -0.2 2.1Experian 1.5 2.2Frontier Strategy Group 0.0 1.0GKI Economic Research 0.0 -Goldman Sachs -0.8 2.8HSBC 1.0 2.7ING -0.1 2.6JPMorgan -0.1 2.2KBC 0.2 2.5Kopint-Tárki -0.1 2.3MKB Bank 0.2 2.8Nomura -0.6 2.3OTP Bank 0.1 2.8Oxford Economics -0.3 2.5Raiffeisen Research 0.1 2.7UBS 0.0 2.5UniCredit -0.4 2.8SummaryMinimum -0.8 1.0Maximum 1.5 3.2Median 0.0 2.5Consensus 0.0 2.4History30 days ago 0.3 2.460 days ago 0.6 2.590 days ago 1.5 2.7Additional ForecastsCentral Bank (Mar. 2015) 0.0 2.6IMF (Oct. 2014) 0.3 2.3European Commission (Feb. 2015) 0.8 2.8



-2

0

2

4

6



-10

0

10

20

30

2000 2005 2010 2015


0

1

2

3

4



-4

0

4

8

12

Q1 12 Q1 13 Q1 14 Q1 15 Q1 16




April 2015

0%

20%

40%

60%

< 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00 > 4.00


23 | Interest Rate | 2000 - 2019 | in %




Notes and sources

Long-term chart period from 2000 to 2019 unless otherwise stated. All monetary sector data are from the Central Bank (MNB, Magyar Nemzeti Bank). Forecasts are based on FocusEconomics Consensus Forecast.23 Interest rate, Central Bank base rate in % (eop).24 Quarterly interest rate, Central Bank base rate in % (eop).25 Interest rate, evolution of 2015 forecasts during the last 18 months.26 Interest rate, evolution of 2016 forecasts during the last 18 months.27 Interest rate, panelist distribution of 2015 forecasts. Concentration of panelists in forecast


Individual Forecasts 2015 2016BofA Merrill Lynch 1.35 1.80Capital Economics 2.10 2.10Citigroup Global Mkts 1.50 3.00Concorde Securities 1.50 2.00Credit Agricole 1.80 2.25Credit Suisse - -Danske Bank 1.75 -Deutsche Bank 1.85 2.75EIU - -Erste Bank - -Experian - -Frontier Strategy Group - -GKI Economic Research - -Goldman Sachs 1.60 2.50HSBC 1.75 2.50ING 1.50 3.00JPMorgan 1.60 2.00KBC - -Kopint-Tárki 1.50 2.00MKB Bank 1.50 2.25Nomura 1.50 2.50OTP Bank 1.50 2.50Oxford Economics 1.80 3.00Raiffeisen Research 1.60 1.60UBS - -UniCredit 1.50 2.50SummaryMinimum 1.35 1.60Maximum 2.10 3.00Median 1.55 2.50Consensus 1.62 2.37History30 days ago 1.84 2.6860 days ago 2.10 2.8890 days ago 2.17 3.08


Interest Rate | Base Rate

1

2

3

4

5

6



0

10

20

30

2000 2005 2010 2015


1

2

3

4

5



0

3

6

9

12

Q1 12 Q1 13 Q1 14 Q1 15 Q1 16




April 2015

0%

20%

40%

60%

< 280 290 300 310 320 330 340 350 > 350


28 | Exchange Rate | HUF per EUR

30 | HUF per EUR 2015 | evol. of fcst

29 | Exchange Rate | HUF per EUR

31 | HUF per EUR 2016 | evol. of fcst

Notes and sources

Long-term chart period from 2000 to 2019 unless otherwise stated. All monetary sector data are from Thomson Reuters. Forecasts based on FocusEconomics Consensus Forecast.28 Exchange rate, HUF per EUR (eop).29 Quarterly exchange rate, HUF per EUR (eop).30 Exchange rate, evolution of 2015 forecast during the last 18 months.31 Exchange rate, evolution of 2016 forecast during the last 18 months.32 Exchange rate, panelist distribution of 2015 forecasts. Concentration of panelists in forecast


Individual Forecasts 2015 2016BofA Merrill Lynch 300 300Capital Economics 305 300Citigroup Global Mkts 314 320Concorde Securities 298 295Credit Agricole 309 290Credit Suisse 320 330Danske Bank 300 -Deutsche Bank 315 -EIU 310 308Erste Bank - -Experian - -Frontier Strategy Group - -GKI Economic Research - -Goldman Sachs 325 325HSBC 305 305ING 310 300JPMorgan 310 -KBC 310 -Kopint-Tárki 305 310MKB Bank 313 319Nomura 325 325OTP Bank 310 312Oxford Economics 309 304Raiffeisen Research 315 325UBS 310 320UniCredit 320 325SummaryMinimum 298 290Maximum 325 330Median 310 311Consensus 311 312History30 days ago 312 31260 days ago 313 31290 days ago 311 313

32 | HUF per EUR 2015 | Panelist Distribution

Exchange Rate | HUF per EUR

260

280

300

320

340

360



220

260

300

340

2000 2005 2010 2015

260

280

300

320

340

360



280

290

300

310

320

Q1 12 Q1 13 Q1 14 Q1 15 Q1 16



April 2015


4

5

6

7

8

9


2015 2016


-50

0

50

100

150

2000 2005 2010 2015

Trade BalanceImportsExports


-10

-5

0

5

2000 2005 2010 2015



1.0

2.0

3.0

4.0

5.0


2015 2016



Individual Forecasts 2015 2016 2015 2016BofA Merrill Lynch 3.5 3.1 - -Capital Economics 3.5 2.8 - -Citigroup Global Mkts 5.0 4.3 - -Concorde Securities 4.2 3.8 - -Credit Agricole 4.6 4.1 - -Credit Suisse - - - -Danske Bank - - - -Deutsche Bank 3.5 3.5 - -EIU 4.5 2.4 - -Erste Bank 4.8 5.1 - -Experian - - - -Frontier Strategy Group - - - -GKI Economic Research - - 6.8 -Goldman Sachs - - - -HSBC 3.7 3.5 5.8 6.1ING - - - -JPMorgan 5.5 6.3 - -KBC - - - -Kopint-Tárki 3.6 3.3 6.2 5.9MKB Bank 4.7 5.8 7.1 8.2Nomura - - - -OTP Bank 3.7 2.9 - -Oxford Economics 4.8 4.0 - -Raiffeisen Research 3.8 3.7 6.6 6.6UBS 4.6 4.4 6.8 7.7UniCredit 3.7 4.0 - -SummaryMinimum 3.5 2.4 5.8 5.9Maximum 5.5 6.3 7.1 8.2Median 4.2 3.8 6.7 6.6Consensus 4.2 3.9 6.5 6.9History30 days ago 3.7 3.2 6.7 7.060 days ago 3.7 3.2 6.3 6.490 days ago 3.1 2.9 7.4 6.7


Notes and sources

Long-term chart period from 2000 to 2019 unless otherwise stated. All external sector data are from the Central Bank (MNB, Magyar Nemzeti Bank). Forecasts based on FocusEconomics Consensus Forecast.33 Current account balance, as % of GDP. 34 Current account balance, evolution of 2015 and 2016 forecasts during the last 18 months.35 Trade balance, exports and imports, in EUR. 36 Trade balance, evolution of 2015 and 2016 forecasts during the last 18 months.



April 2015


Exports and Imports

Individual Forecasts 2015 2016 2015 2016BofA Merrill Lynch - - - -Capital Economics - - - -Citigroup Global Mkts - - - -Concorde Securities - - - -Credit Agricole - - - -Credit Suisse - - - -Danske Bank - - - -Deutsche Bank - - - -EIU - - - -Erste Bank - - - -Experian - - - -Frontier Strategy Group - - - -GKI Economic Research 89.3 - 82.6 -Goldman Sachs - - - -HSBC 88.8 93.2 83.0 87.1ING - - - -JPMorgan - - - -KBC - - - -Kopint-Tárki 87.2 90.2 81.0 84.3MKB Bank 85.8 87.4 78.7 79.2Nomura - - - -OTP Bank - - - -Oxford Economics - - - -Raiffeisen Research 88.3 92.2 81.7 85.6UBS 89.8 96.5 83.0 88.8UniCredit - - - -SummaryMinimum 85.8 87.4 78.7 79.2Maximum 89.8 96.5 83.0 88.8Median 88.5 92.2 82.1 85.6Consensus 88.2 91.9 81.7 85.0History30 days ago 88.7 93.2 82.0 86.260 days ago 87.9 92.3 81.6 85.990 days ago 89.9 95.1 82.6 88.3


Notes and sources

Long-term chart period from 2000 to 2019 unless otherwise stated. All external sector data are from the Central Bank (MNB, Magyar Nemzeti Bank). Forecasts based on FocusEconomics Consensus Forecast.37 Exports, annual variation in %. 38 Exports, evolution of 2015 and 2016 forecasts during the last 18 months.39 Imports, annual variation in %. 40 Imports, evolution of 2015 and 2016 forecasts during the last 18 months.

80

84

88

92


2015 2016


-40

-20

0

20

40

2000 2005 2010 2015



-40

-20

0

20

40

2000 2005 2010 2015



85

90

95

100


2015 2016




April 2015


100

110

120

130

140


2015 2016


40

70

100

130

160

2000 2005 2010 2015

Hungary

Eastern Europe


2

4

6

8

10

12

2000 2005 2010 2015



25

30

35

40

45


2015 2016



Individual Forecasts 2015 2016 2015 2016BofA Merrill Lynch - - 111 106Capital Economics - - - -Citigroup Global Mkts - - - -Concorde Securities - - - -Credit Agricole - - - -Credit Suisse - - - -Danske Bank - - - -Deutsche Bank - - - -EIU 43.7 40.7 120 126Erste Bank - - - -Experian - - - -Frontier Strategy Group - - - -GKI Economic Research - - - -Goldman Sachs - - - -HSBC - - 109 105ING - - 112 -JPMorgan - - - -KBC - - - -Kopint-Tárki - - - -MKB Bank - - - -Nomura - - - -OTP Bank - - - -Oxford Economics 40.3 47.6 - -Raiffeisen Research 32.5 34.0 101 95UBS - - - -UniCredit 33.1 31.5 114 109SummaryMinimum 32.5 31.5 101 95Maximum 43.7 47.6 120 126Median 36.7 37.4 111 106Consensus 37.4 38.5 111 109History30 days ago 32.4 33.7 113 11060 days ago 34.6 35.5 112 10990 days ago 33.9 34.0 109 105


Notes and sources

Long-term chart period from 2000 to 2019 unless otherwise stated. All external sector data are from the Central Bank (MNB, Magyar Nemzeti Bank). Forecasts are based on FocusEconomics Consensus Forecast.41 International reserves, months of imports. 42 International reserves, evolution of 2015 and 2016 forecasts during the last 18 months.43 External debt as % of GDP.44 External debt, evolution of 2015 and 2016 forecasts during the last 18 months.



April 2015

Hungary in the Region


Fact Sheet

Hungary 2.9%

Russia 47.1%

Turkey 18.1%

Poland 11.4%

Czech Republic

4.7%

Other15.7%

Hungary 2.7%

Russia 38.8%

Turkey 20.3%

Ukraine 12.3%

Poland 10.4%

Other15.5%

Russia8.8%

Other EU-27

33.9%

Germany25.1%

Austria7.1%

Slovakia5.6%

China7.4%

Other12.0%

Other EU-27

35.6%

Germany25.6%

Romania6.2%

Slovakia6.1%

Other26.5%

Other17.3%


Mineral Fuels11.9%

Other

10.4%


Food8.2%

Trade Structure



Economic Structure


Exports

Exports

Imports

Imports

General Data


Political Data



• Unorthodox fiscal policy• Small domestic market• Large external debt

• Highly educated work force • Political instability• Strategic geographical location

• EU membership provides support to economy against financial market crises

Energy (2012)Primary Energy Production (trillion Btu): 370Primary Energy Consumption (trillion Btu): 951Electricity Generation (billion kW-h): 32.5Electricity Consumption (billion kW-h): 36.8Oil Supply (thousand bpd): 28.0Oil Consumption (thousand bpd): 133CO2 Emmissions (million metric tons): 47.9

Agency Rating OutlookMoody’s: Ba1 StableS&P: BB+ StableFitch Ratings: BB+ Stable


Transportation (2013) Airports: 41Railways (km): 8,057Roadways (km): 199,567Waterways (km): 1,622Chief Ports: Budapest, Dunaujvaros

Official name: HungaryCapital: Budapest (3.0m)Other cities: Miskolc (0.7m)

Debrecen (0.5m)Area (km2): 93,028Population (million, 2014 est.): 9.9Population density (per km2, 2014): 107Population growth rate (%, 2014 est.): -0.2Life expectancy (years, 2014 est.): 75.5Illiteracy rate (%, 2011): 1.0Language: HungarianMeasures: Metric systemTime: GMT+1

Prime Minister: Viktor OrbánLast elections: 6 April 2014Next elections: April 2018Central Bank President: György Matolcsy

-20

0

20

40

60

80

100

1202003-05 2006-08 2009-11

Net Exports

Investment


PrivateConsumption

0

20

40

60

80

1002002-04 2005-07 2008-10

Agriculture

Manufacturing

Other Industry

Services

FOCUSECONOMICS Latvia


April 2015

Latvia

REAL SECTOR | Industrial production deteriorates for the fourth consecutive month in FebruaryIn February, industrial production contracted 1.6% over the same month last year. The contraction followed the 3.5% drop observed in January and marked the fourth consecutive decline in Latvia’s industrial production. February’s deterioration resulted from a large contraction in electricity production and gas supply, which was only partially offset by an increase in the mining and quarrying sector.

A month-on-month comparison paints a better picture of industrial production than the annual data. Industrial production rose a seasonally-adjusted 1.5% over the previous month, which contrasted the 3.1% decrease observed in January.

Meanwhile, the annual average variation in industrial production in February was unchanged at January’s minus 0.9%.

FocusEconomics Consensus Forecast panelists expect industrial production to expand 1.8% in 2015, which is down 0.2 percentage points from the previous month’s projection. For 2016, the panel expects growth in industrial output to accelerate to 2.7%.

Outlook stable


Eric DenisEconomist

Latvia

2011-13 2014-16 2017-19Population (million): 2.1 2.0 2.0GDP (EUR bn): 21.8 25.0 29.4GDP per capita (EUR): 10,645 12,322 14,652GDP growth (%): 4.7 2.7 3.8Fiscal Balance (% of GDP): -1.7 -1.2 -0.9Public Debt (% of GDP): 40.6 37.1 33.5Inflation (%): 2.2 1.0 2.4Current Account (% of GDP): -2.8 -2.8 -2.9

The economy grew at the slowest pace of the post-crisis period, expanding just 2.4% in 2014 and signals from the latest economic data are not positive: industrial production contracted slightly and unemployment reached a 10-month high in February. Despite this disappointing news, strong private consumption, which has been driven by real wage increases, should sustain economic growth going forward. In addition, the decline in exports to Russia due to the current tense diplomatic situation and resulting Russian sanctions should be compensated for by increased trade activities with the European Union as the region’s economy regains momentum.

Latvia’s economic outlook remains fairly positive. Although tensions between the EU and Russia will continue to create uncertainty in various fronts of the economy, low oil prices together with an accommodative monetary policy are expected to support domestic demand. FocusEconomics panelists expect that GDP will grow 2.5% in 2015, which is unchanged from last month’s estimate. Panelists expect that GDP growth will increase to 3.3% in 2016.

In February, harmonized consumer prices were unchanged over the same period last year following a 0.4% decrease in January. FocusEconomics panelists expect HICP inflation to average 0.5% this year, which is down 0.1 percentage points from last month’s projection. In 2016, the panel sees inflation rising to an average of 1.8%.


Note: Year-on-year changes and annual average variation of industrial production index in %.Source: Central Statistics Bureau and FocusEconomics calculations.

-6

-3

0

3

6



%



April 2015

The Central Bank expects the economy to expand 2.7% this year. FocusEconomics Consensus Forecast panelists expect the economy to grow 2.5% in 2015, which is unchanged from last month’s projection. For 2016, panelists expect the economy to expand 3.3%.

MONETARY SECTOR | Consumer prices rebound in MarchIn March, consumer prices rose 0.8% over the previous month. The result was above the 0.3% rise tallied in February and marked the largest increase in over three years. March’s increase was largely the result of higher housing and health costs, which were partly offset by a fall in prices for food and transport.

Consumer prices grew 0.4% over the same month last year, which contrasted the 0.1% drop observed in February. Meanwhile, annual HICP consumer prices—based on the harmonized index of consumer prices— recorded zero growth in February, which is the last month for which data are available. The reading contrasted the 0.3% decrease tallied in January. Annual average HICP inflation remained unchanged at January’s 0.6% in February.

The Central Bank expects HICP inflation to average 1.4% in 2015. FocusEconomics Consensus Forecast panelists expect HICP inflation to average 0.5% in 2015, which is down 0.1 percentage points from last month’s projection. For 2016, the panel expects inflation to average 1.8%.


Note: Month-on-month and year-on-year variations of consumer price index in %.Source: Central Statistics Bureau.

-0.5

0.0

0.5

1.0

1.5

-1.0

-0.5

0.0

0.5

1.0


Month-on-month (left scale)Year-on-year (right scale)

%%



April 2015


Annual Data 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019Real Sector Population (million) 2.1 2.1 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0GDP per capita (USD) 11,213 13,628 13,707 15,076 15,729 13,066 13,624 15,061 16,824 18,561GDP (USD bn) 23.8 28.3 28.0 30.7 32.0 26.5 27.5 30.3 33.8 37.2GDP per capita (EUR) 8,565 9,782 10,779 11,373 11,835 12,233 12,897 13,705 14,630 15,622GDP (EUR bn) 18.2 20.3 22.0 23.2 24.1 24.8 26.1 27.6 29.4 31.3Economic Growth (Nom. GDP, ann. var. in %) -3.9 11.7 8.6 5.2 3.8 3.0 5.1 5.9 6.4 6.5Economic Growth (GDP, annual var. in %) -2.9 5.0 4.8 4.2 2.4 2.5 3.3 3.7 3.9 3.9Private Consumption (annual var. in %) 3.1 2.9 3.0 6.2 2.3 3.2 3.6 3.8 4.0 4.1Government Consumption (ann. var. in %) -8.1 3.1 0.4 2.9 3.4 - - - - -Fixed Investment (annual var. in %) -20.0 24.2 14.5 -5.2 1.3 2.0 4.4 5.4 5.6 6.1Industrial Production (annual var. in %) 14.8 9.0 6.2 -0.4 -1.0 1.8 2.7 3.4 3.5 3.5Retail Sales (annual var. in %) -3.0 2.4 7.3 3.8 3.5 4.8 4.9 5.4 5.5 5.7Unemployment (% of active population, aop) 18.7 16.2 14.9 11.9 10.9 10.0 9.2 8.4 7.7 7.4Fiscal Balance (% of GDP) -8.2 -3.4 -0.8 -0.9 -1.3 -1.2 -1.1 -1.0 -0.9 -0.9Public Debt (% of GDP) 46.8 42.7 40.9 38.2 38.8 36.6 35.9 34.7 33.5 32.3Monetary and Financial Sector Money (annual var. of M2 in %) 11.2 0.3 3.8 1.9 8.2 - - - - -Inflation (CPI, annual variation in %, eop) 2.5 4.1 1.6 -0.4 0.2 - - - - -Inflation (HICP, annual variation in %, aop) -1.2 4.2 2.3 0.0 0.7 0.5 1.8 2.3 2.5 2.5Inflation (PPI, annual variation in %, aop) 3.1 7.7 3.7 1.5 0.4 - - - - -ECB Refinancing Rate (%, eop) 1.00 1.00 0.75 0.25 0.05 0.05 0.05 0.39 0.76 1.543-Month EURIBOR (%, eop) 1.01 1.36 0.19 0.29 0.08 0.03 0.06 0.62 1.00 1.5710-Year Bond Yield (%, eop) 3.50 6.63 5.25 5.25 3.12 - - - - -Stock Market (variation of OMXR in %) 41.1 -5.7 6.7 16.2 -11.3 - - - - -Exchange Rate (USD per EUR, eop) 1.34 1.30 1.32 1.38 1.21 1.04 1.07 1.13 1.17 1.20Exchange Rate (USD per EUR, aop) 1.33 1.39 1.29 1.33 1.33 1.07 1.06 1.10 1.15 1.19External Sector Current Account Balance (% of GDP) 2.3 -2.8 -3.3 -2.3 -3.1 -2.4 -2.8 -2.8 -2.9 -3.0Current Account Balance (EUR bn) 0.4 -0.6 -0.7 -0.5 -0.7 -0.6 -0.7 -0.8 -0.8 -0.9Merchandise Trade Balance (EUR bn) -1.7 -2.4 -2.6 -2.6 -2.4 -2.7 -2.9 -3.0 -3.0 -3.0Merchandise Exports (EUR bn) 6.7 8.5 9.9 10.0 10.2 10.9 11.4 11.9 12.4 12.9Merchandise Imports (EUR bn) 8.4 11.0 12.5 12.6 12.6 13.6 14.3 14.9 15.4 15.9Merchandise Exports (annual variation in %) 0.0 26.9 16.5 1.0 2.0 6.7 4.6 4.5 4.5 4.0Merchandise Imports (annual variation in %) 25.4 31.0 13.6 0.8 0.0 7.5 5.3 4.4 3.6 3.2External Debt (EUR bn) 30.1 29.6 30.3 30.5 33.4 30.1 31.5 32.5 34.2 35.8External Debt (% of GDP) 166 146 137 132 139 121 121 118 116 115 Quarterly Data Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16Economic Growth (GDP, annual var. in %) 2.4 2.1 2.6 2.5 2.5 2.0 2.9 3.0 3.1 3.6Economic Growth (GDP, qoq variation in %) 0.5 0.6 - - - - - - - -Inflation (HICP, annual variation in %, aop) 0.9 0.7 0.1 0.7 0.8 0.8 1.8 1.9 2.3 2.4ECB Refinancing Rate (%, eop) 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.053-Month EURIBOR (%, eop) 0.08 0.08 0.02 0.03 0.03 0.03 0.06 0.06 0.07 0.06Exchange Rate (USD per EUR, eop) 1.26 1.21 1.07 1.05 1.04 1.04 1.05 1.06 1.06 1.07 Monthly Data Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15Industrial Production (annual variation in %) -2.0 -2.0 -1.2 0.8 0.6 -2.2 -0.6 -3.5 -1.6 -Inflation (CPI, mom variation in %) 0.3 -0.4 -0.7 0.5 0.0 -0.3 -0.7 0.1 0.3 0.8Inflation (CPI, annual variation in %) 0.7 0.7 0.9 1.0 0.7 0.9 0.2 -0.4 -0.1 0.4Inflation (HICP, annual variation in %) 0.8 0.6 0.8 1.2 0.7 0.9 0.3 -0.4 0.0 0.5Exchange Rate (USD per EUR, eop) 1.37 1.34 1.32 1.26 1.25 1.25 1.21 1.13 1.12 1.07



April 2015


1 | Real GDP | 2000-2019 | var. in %








General: Long-term chart period from 2000 to 2019 unless otherwise stated. All real sector data are from the Central Statistical Bureau (CSB) and Eurostat. See below for details. Forecasts based on FocusEconomics Consensus Forecast. 1 GDP, annual variation in %. Source: CSB.2 Quarterly GDP (non-seasonally adjusted), year-on-year variation in %.

Source: CSB.3 GDP, evolution of 2015 forecasts during the last 18 months.4 GDP, evolution of 2016 forecasts during the last 18 months.5 Unemployment, % of active population. Source: CSB.6 Balance of non-financial public sector as % of GDP. Source: Eurostat.7 Unemployment, evolution of 2015 and 2016 forecasts during the last 18



Individual Forecasts 2015 2016 2015 2016Capital Economics 1.7 2.0 -1.0 -1.0Citadele 2.4 3.4 -1.6 -1.2Danske Bank 2.6 3.1 - -DekaBank 2.7 3.3 -1.1 -1.0DNB 2.8 3.5 -1.0 -1.0EIU 2.8 3.5 -1.1 -1.0JPMorgan 3.0 3.6 -0.8 -0.8Nordea 2.6 4.0 -1.5 -1.5Oxford Economics 2.9 4.1 -1.1 -1.1SEB 2.4 2.4 -1.3 -1.2Swedbank 1.9 3.5 -1.5 -1.2WIIW 2.1 2.8 -1.3 -1.2SummaryMinimum 1.7 2.0 -1.6 -1.5Maximum 3.0 4.1 -0.8 -0.8Median 2.6 3.5 -1.1 -1.1Consensus 2.5 3.3 -1.2 -1.1History30 days ago 2.5 3.3 -1.2 -1.060 days ago 2.7 3.4 -1.2 -0.990 days ago 2.8 3.4 -1.2 -0.9Additional ForecastsCen. Bank (Dec. 2014) 2.7 - - -Euro. Comm. (Feb. 2015) 2.9 3.6 - -IMF (Oct. 2014) 3.2 3.4 - -


-20

-10

0

10

20

2000 2005 2010 2015

LatviaEastern EuropeWorld

5

10

15

20

2000 2005 2010 2015

Latvia

Eastern Europe

-3

0

3

6

9

Q1 12 Q1 13 Q1 14 Q1 15 Q1 16

LatviaEastern EuropeWorld

1

2

3

4

5

6



1

2

3

4

5

6



8.5

9.0

9.5

10.0


2015 2016

-1.5

-1.0

-0.5

0.0


2015 2016

-10

-5

0

5

2000 2005 2010 2015

Latvia

Eastern Europe



April 2015


9 | Inflation | 2000 - 2019 | In %



10 | Inflation | Q1 12-Q4 16 | In % Inflation and Current Account Balance



Notes and sources

General: Long-term chart period from 2000 to 2019 unless otherwise stated. All monetary and externa sector data are from the Central Statistical Bureau (CSB) and the Bank of Latvia (BoL, Latvijas Banka). See below for details. Forecasts based on FocusEconomics Consensus Forecast. 9 Inflation, annual average variation of harmonized index of consumer prices (HICP) in %.

Source: CSB. 10 Inflation, annual variation of quarterly average harmonized index of consumer prices (HICP)

in %. Source: CSB. 11 Inflation, evolution of 2015 forecasts during the last 18 months.12 Inflation, evolution of 2016 forecasts during the last 18 months.13 Current account balance as % of GDP. Source: BoL.14 Current account balance as % of GDP, evolution of 2015 and 2016 forecasts during the last

18 months.

-30

-20

-10

0

10

2000 2005 2010 2015

Latvia

Eastern Europe-3.0

-2.5

-2.0

-1.5


2015 2016

-10

0

10

20

30

2000 2005 2010 2015

LatviaEastern Europe

-4

0

4

8

12

Q1 12 Q1 13 Q1 14 Q1 15 Q1 16

Latvia

Eastern Europe

-1

0

1

2

3

4



0

1

2

3

4

5



Individual Forecasts 2015 2016 2015 2016Capital Economics 0.3 1.5 -2.5 -2.5Citadele 0.8 2.0 -2.5 -2.6Danske Bank 0.8 1.9 -1.6 -1.9DekaBank 0.5 1.7 -2.6 -2.9DNB 0.5 2.0 -2.5 -3.0EIU 0.5 2.1 -2.6 -2.6JPMorgan 0.1 1.1 -0.3 -0.7Nordea 0.2 2.0 -2.6 -3.0Oxford Economics 0.7 2.4 - -SEB 0.6 0.7 -3.3 -3.6Swedbank 0.5 2.5 -2.6 -4.3WIIW 0.8 2.2 -3.2 -3.5SummaryMinimum 0.1 0.7 -3.3 -4.3Maximum 0.8 2.5 -0.3 -0.7Median 0.5 2.0 -2.6 -2.9Consensus 0.5 1.8 -2.4 -2.8History30 days ago 0.6 1.9 -2.1 -2.660 days ago 1.3 2.1 -1.7 -2.290 days ago 1.8 2.2 -1.6 -2.0Additional ForecastsCen. Bank (Dec. 2014) 1.4 - - -Euro. Comm. (Feb. 2015) 0.9 1.9 - -IMF (Oct. 2014) 1.6 1.9 - -

HICP Current Accountvariation in % % of GDP



April 2015

Fact Sheet

Latvia in the Region


Latvia 30.2%

Lithuania 45.6%

Estonia24.2%Latvia

32.2%

Lithuania 46.8%

Estonia21.1%

Russia9.2%

Other EU-27

32.1%

Lithuania19.1%

Germany11.6%

Poland8.2%

Other19.8%

Russia18.2%

Other EU-27

24.4%

Lithuania14.8%

Estonia12.1%

Germany7.5%

Other23.0%

Other12.7%


Mineral Fuels16.2%

Food13.8%

Other9.3%


Mineral Fuels7.2%

Agric. Raw Mat.

10.3%

Food16.9%

Trade Structure



Economic Structure


Exports

Exports

Imports

Imports

-20

0

20

40

60

80

100

1202003-05 2006-08 2009-11

Net Exports

Investment


PrivateConsumption

0

20

40

60

80

1002002-04 2005-07 2008-10

Agriculture

Manufacturing

Other Industry

Services

General Data


Political Data



• High private debt• Small domestic market

• Strong dependency on energy supply from Russia

• Strategic location between Russia and European Union• EU membership provides support against financial crisis

Energy (2012) Primary Energy Production (trillion Btu): 39.0Primary Energy Consumption (trillion Btu): 169Electricity Generation (billion kW-h): 6.0Electricity Consumption (billion kW-h): 7.1Oil Consumption (thousand bpd): 32.4CO2 Emmissions (million metric tons): 7.9

Agency Rating OutlookMoody’s: A3 StableS&P: A- StableFitch Ratings: A- Stable


Transportation (2013) Airports: 42Railways (km): 2,239Roadways (km): 72,440Waterways (km): 300Chief Ports: Riga, Ventspils

Official name: Republic of LatviaCapital: Riga (1.1m)Area (km2): 64,589Population (million, 2014 est.): 2.0Population density (per km2, 2014): 31.5Population growth rate (%, 2014 est.): -0.6Life expectancy (years, 2014 est.): 73.4Illiteracy rate (%, 2011): 0.2Language: Latvian, RussianMeasures: Metric systemTime: GMT+2

Prime Minister: Laimdota StraujumaLast elections: 4 October 2014Next elections: October 2018Central Bank President: Ilmars Rimsevics

FOCUSECONOMICS Lithuania


April 2015

Lithuania

REAL SECTOR | Industrial production rebounds in February In February, industrial production expanded 5.6% over the same month of last year, which contrasted the 2.0% decrease recorded in January. The turnaround reflects a notable pick-up in manufacturing and that output of several sectors, including water supply, mining and quarrying as well as electricity, gas and steam, shrank at a softer pace than in January.

On a sequential basis, industrial production increased 6.2% over the previous month in seasonally-adjusted terms, contrasting the 2.3% fall recorded in January and recording the largest expansion since June 2012. Annual average growth in industrial production improved from 0.6% in January to 1.2% in February, the best reading in a year.

FocusEconomics Consensus Forecast panelists expect industrial production to increase 2.3% year, which is unchanged over last month’s estimate. The panel expects industrial production to accelerate to a 3.5% expansion in 2016.

The Central Bank expects GDP to grow 2.7% in 2015 and 3.5% in 2016. FocusEconomics Consensus Forecast panelists see the economy growing 2.7% in 2015, which is unchanged from last month’s estimate. In 2016, the panel expects GDP to expand 3.4%.

Outlook stable



Lithuania

2011-13 2014-16 2017-19Population (million): 3.0 2.9 2.9GDP (EUR bn): 33.2 37.6 43.9GDP per capita (EUR): 11,075 12,776 15,157GDP growth (%): 4.4 3.0 3.9Fiscal Balance (% of GDP): -4.9 -1.4 -0.9Public Debt (% of GDP): 38.7 39.5 34.9Inflation (%): 2.8 0.6 2.1Current Account (% of GDP): -1.1 -0.7 -1.8External Debt (% of GDP): 75.9 70.7 65.5

Economic struggles in Russia took their toll on Lithuania’s economy in Q4 2014, which caused the external sector to perform worse and GDP growth to moderate. However, the International Monetary Fund (IMF) stated recently that the country’s, “recent resiliency augurs well for the future.” The IMF expects that low energy prices and improving prospects for the Eurozone will partially compensate for cautious investment and subdued demand from Russia. Moreover, in order to keep the deficit from widening, the IMF recommended targeted spending cuts and tax increases worth at least 0.3% of GDP in 2015. Meanwhile, concerns about Russia’s military intentions prompted Lithuania to increase defense spending and reintroduce military conscription.

Lithuania’s economic outlook is fairly stable, even though economic weakness in Russia—Lithuania’s main exports destination outside the European Union—and ongoing geopolitical tensions constitute downside risks. FocusEconomics Consensus Forecast panelists see the economy growing 2.7% in 2015, which is unchanged from last month’s forecast. For 2016, the panel expects the economy to expand 3.4%.

Harmonized consumer prices fell 1.1% year-on-year in March, coming in above February’s steep 1.5% drop. FocusEconomics Consensus Forecast participants expect HICP inflation to average 0.2% in 2015 and 1.3% in 2016.


Note: Year-on-year changes and annual average growth of industrial production index in %.Source: Statistics Lithuania and FocusEconomics calculations.

-20

-10

0

10

20

30


Year-on-year

Annual average

%



April 2015

MONETARY SECTOR | Drop in consumer prices softens in MarchIn March, consumer prices increased 0.8% over the previous month, contrasting the 0.3% decline registered in February. The result represented the largest increase since March 2012. According to the statistical institute, the result was driven by lower prices for foodstuff, fuel, and clothing.

In annual terms, consumer prices fell 1.4%, which followed February’s steep 1.8% drop. Meanwhile, harmonized consumer prices (based on the harmonized index of consumer prices) fell 1.1% in March, coming in above February’s 1.5% decline. Annual average HICP prices fell 0.2% in March, coming in below February’s flat reading and representing the steepest drop since August 2004.

The Central Bank expects harmonized consumer prices to fall 0.3% on average in 2015. For 2016, the Bank expects HICP inflation to average 1.6%. FocusEconomics Consensus Forecast panelists expect harmonized inflation to average 0.2% in 2015, which is down 0.5 percentage points from last month’s estimate. In 2016, the panel sees inflation at 1.3%.


Note: Year-on-year and month-on-month variation of consumer price index in %.Source: Statistics Lithuania and FocusEconomics calculations.

-2.0

0.0

2.0

4.0

-2.0

-1.0

0.0

1.0




%%



April 2015


Annual Data 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019Real Sector Population (million) 3.1 3.0 3.0 3.0 3.0 2.9 2.9 2.9 2.9 2.9GDP per capita (USD) 11,818 14,399 14,190 15,579 16,334 13,558 14,109 15,607 17,403 19,172GDP (USD bn) 36.6 43.6 42.4 46.3 48.3 39.9 41.3 45.5 50.5 55.3GDP per capita (EUR) 9,041 10,304 11,145 11,777 12,276 12,694 13,357 14,202 15,134 16,136GDP (EUR bn) 28.0 31.2 33.3 35.0 36.3 37.3 39.1 41.4 43.9 46.6Economic Growth (Nom. GDP, ann. var. in %) 4.1 11.4 6.7 5.1 3.7 2.9 4.7 5.8 6.0 6.1Economic Growth (GDP, annual var. in %) 1.6 6.1 3.8 3.3 2.9 2.7 3.4 3.7 3.9 4.0Total Consumption (annual var. in %) -3.4 3.6 3.0 3.7 4.6 - - - - -Private Consumption (annual var. in %) -3.4 4.6 3.6 4.2 5.6 3.8 3.9 4.0 4.1 4.3Government Consumption (ann. var. in %) -3.5 0.3 1.2 1.8 1.3 - - - - -Fixed Investment (annual var. in %) 1.4 19.4 -1.6 7.0 8.0 4.7 6.3 6.2 6.1 5.6Industrial Production (annual var. in %) 6.3 6.8 3.7 3.8 0.1 2.3 3.5 4.0 3.9 3.8Retail Sales (annual variation in %) -6.7 6.1 3.8 4.3 5.7 - - - - -Unemployment (aop, % of active population) 17.8 15.4 13.4 11.8 10.7 9.8 9.0 8.8 8.5 8.4Fiscal Balance (% of GDP) -6.9 -9.0 -3.2 -2.6 -1.7 -1.5 -1.0 -1.0 -0.9 -0.7Public Debt (% of GDP) 36.3 37.3 39.9 39.0 40.4 40.2 38.0 36.6 35.1 33.1Monetary and Financial Sector Money (annual variation of M2 in %) 9.4 4.8 7.2 4.9 1.5 - - - - -Inflation (CPI, annual variation in %, eop) 3.8 3.4 2.8 0.4 -0.3 - - - - -Inflation (HICP, annual variation in %, aop) 1.2 4.1 3.2 1.2 0.2 0.2 1.3 2.1 2.1 2.1Inflation (PPI, annual variation in %, aop) 10.3 13.8 5.0 -2.4 -4.9 - - - - -ECB Refinancing Rate (%, eop) 1.00 1.00 0.75 0.25 0.05 0.05 0.05 0.39 0.76 1.543-Month EURIBOR (%, eop) 1.01 1.36 0.19 0.29 0.08 0.03 0.06 0.62 1.00 1.5710-Year Bond Yield (%, eop) 4.99 6.40 4.09 3.80 2.00 - - - - -Exchange Rate (USD per EUR, eop) 1.34 1.30 1.32 1.38 1.21 1.04 1.07 1.13 1.17 1.20Exchange Rate (USD per EUR, aop) 1.33 1.39 1.29 1.33 1.33 1.07 1.06 1.10 1.15 1.19External Sector Current Account Balance (% of GDP) -0.3 -3.9 -1.2 1.6 -0.5 -0.5 -1.1 -1.7 -1.8 -1.9Current Account Balance (EUR bn) -0.1 -1.2 -0.4 0.6 -0.2 -0.2 -0.4 -0.7 -0.8 -0.9Merchandise Trade Balance (EUR bn) -2.0 -2.7 -1.8 -1.7 -2.1 -2.7 -3.0 -3.1 -3.7 -4.4Merchandise Exports (EUR bn) 15.7 20.2 23.0 24.5 24.4 24.6 26.3 28.1 30.3 32.8Merchandise Imports (EUR bn) 17.7 22.8 24.9 26.2 26.5 27.3 29.3 31.2 34.0 37.2Merchandise Exports (annual var. in %) 33.1 28.7 13.9 6.5 -0.4 0.8 6.8 7.1 7.7 8.2Merchandise Imports (annual var. in %) 35.1 28.8 9.2 5.2 1.1 2.9 7.3 6.6 9.0 9.5External Debt (EUR bn) 24.0 25.0 25.9 24.4 25.4 26.6 27.7 28.3 28.8 29.0External Debt (% of GDP) 85.8 80.3 77.8 69.7 69.9 71.3 70.9 68.4 65.8 62.3 Quarterly Data Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16Economic Growth (GDP, annual var. in %) 2.7 2.4 2.6 2.7 2.8 2.9 3.2 3.4 3.4 3.7Economic Growth (GDP, qoq variation in %) 0.5 0.6 - - - - - - - -Inflation (HICP, annual variation in %, aop) 0.3 0.2 -1.3 0.3 0.3 1.0 1.1 1.2 1.3 1.4ECB Refinancing Rate (%, eop) 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.053-Month EURIBOR (%, eop) 0.08 0.08 0.02 0.03 0.03 0.03 0.06 0.06 0.07 0.06Exchange Rate (USD per EUR, eop) 1.26 1.21 1.07 1.05 1.04 1.04 1.05 1.06 1.06 1.07 Monthly Data Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15Industrial Production (annual variation in %) 1.3 4.5 -5.3 2.3 1.3 6.1 3.8 -2.0 5.6 -Inflation (CPI, mom variation in %) 0.0 -0.5 -0.1 0.4 0.1 0.0 -0.6 -1.3 -0.3 0.8Inflation (CPI, annual variation in %) 0.2 0.3 0.2 -0.1 0.1 0.2 -0.3 -1.5 -1.8 -1.4Inflation (HICP, annual variation in %) 0.3 0.5 0.3 0.0 0.3 0.4 -0.1 -1.4 -1.5 -1.1Exchange Rate (USD per EUR, eop) 1.37 1.34 1.32 1.26 1.25 1.25 1.21 1.13 1.12 1.07



April 2015


1 | Real GDP | 2000-2019 | var. in %








General: Long-term chart period from 2000 to 2019 unless otherwise stated. All real sector data are from Statistics Lithuania (SL, Statistikos Departementas) and Eurostat. Forecasts based on FocusEconomics Consensus Forecast. 1 GDP, annual variation in %. Source: SL.2 Quarterly GDP (not seasonally adjusted), year-on-year variation in %.

Source: SL. 3 GDP, evolution of 2015 forecasts during the last 18 months.4 GDP, evolution of 2016 forecasts during the last 18 months.5 Unemployment, % of active population. Source: SL.6 Balance of non-financial public sector as % of GDP. Source: Eurostat.7 Unemployment, evolution of 2015 and 2016 forecasts during the last 18



Individual Forecasts 2015 2016 2015 2016Capital Economics 2.0 2.0 - -Danske Bank 2.5 3.1 - -DNB 2.6 3.0 -1.7 -1.0EIU 2.9 3.0 -1.9 -1.9JPMorgan 3.5 4.0 -1.5 -1.2Nordea 2.8 4.2 -1.4 -1.0Oxford Economics 3.6 4.6 -0.6 -0.6SEB 2.6 3.5 -1.5 -0.5Swedbank 2.3 3.5 -1.6 -1.0WIIW 2.4 2.9 -1.4 -1.0SummaryMinimum 2.0 2.0 -1.9 -1.9Maximum 3.6 4.6 -0.6 -0.5Median 2.6 3.3 -1.5 -1.0Consensus 2.7 3.4 -1.5 -1.0History30 days ago 2.7 3.4 -1.5 -1.060 days ago 2.8 3.4 -1.5 -1.090 days ago 2.9 3.5 -1.7 -1.3Additional ForecastsCentral Bank (Mar. 2015) 2.7 3.5 - -IMF (Apr. 2015) 2.8 3.2 - -Eur. Comm. (Feb. 2015) 3.0 3.4 - -


-20

-10

0

10

20

2000 2005 2010 2015

LithuaniaEastern EuropeWorld

0

5

10

15

20

2000 2005 2010 2015

LithuaniaEastern Europe

-2

0

2

4

6

Q1 12 Q1 13 Q1 14 Q1 15 Q1 16

LithuaniaEastern EuropeWorld

1

2

3

4

5



1

2

3

4

5

6



8

9

10

11


2015 2016

-2.0

-1.5

-1.0

-0.5


2015 2016

-10

-5

0

5

2000 2005 2010 2015

Lithuania

Eastern Europe



April 2015


9 | Inflation | 2000 - 2019 | in %






Notes and sources

General: Long-term chart period from 2000 to 2019 unless otherwise stated. All monetary and external sector data are from Statistics Lithuania (SL, Statistikos Departementas) and the Bank of Lithuania (LB, Lietuvos Bankas). See below for details. Forecasts based on FocusEconomics Consensus Forecast. 9 Inflation, annual average variation of harmonized index of consumer prices (HICP) in %

Source: SL.10 Inflation, annual variation of quarterly average harmonized index of consumer prices (HICP)

in %. Source: SL.11 Inflation, evolution of 2015 forecasts during the last 18 months.12 Inflation, evolution of 2016 forecasts during the last 18 months.13 Current account balance as % of GDP. Source: LB.14 Current account balance as % of GDP, evolution of 2015 and 2016 forecasts during the last

18 months.

-20

-10

0

10

2000 2005 2010 2015


-3

-2

-1

0


2015 2016

-10

0

10

20

30

2000 2005 2010 2015


-4

0

4

8

12

Q1 12 Q1 13 Q1 14 Q1 15 Q1 16


-1

0

1

2

3

4



0

1

2

3

4



Individual Forecasts 2015 2016 2015 2016Capital Economics 0.3 1.5 - -Danske Bank 0.6 1.6 -0.9 -0.7DNB 0.0 1.5 -0.5 -2.0EIU 0.0 1.1 -2.1 -2.2JPMorgan 0.2 1.0 1.2 1.0Nordea 0.5 2.4 0.0 0.5Oxford Economics -0.3 0.9 0.8 -0.3SEB -0.4 0.3 -1.0 -2.0Swedbank - - -1.7 -3.2WIIW 0.6 1.8 -0.8 -0.9SummaryMinimum -0.4 0.3 -2.1 -3.2Maximum 0.6 2.4 1.2 1.0Median 0.2 1.5 -0.8 -0.9Consensus 0.2 1.3 -0.5 -1.1History30 days ago 0.7 1.6 -0.7 -1.160 days ago 1.0 1.8 -0.5 -0.990 days ago 1.2 1.8 -0.4 -0.9Additional ForecastsCentral Bank (Mar. 2015) -0.3 1.6 - -IMF (Oct. 2014) 1.3 2.0 - -Eur. Comm. (Feb. 2015) 0.4 1.6 - -




April 2015

Fact Sheet

Lithuania in the Region


Lithuania 45.8%

Latvia 29.8%

Estonia24.4%

Lithuania 46.8%

Latvia 32.2%

Estonia21.1%

Russia31.6%

Other EU-27

26.4%

Germany10.0%

Poland9.9%

Latvia6.2%

Other16.0%

Russia19.0%

Other EU-27

28.3%

Latvia11.0%

Germany7.9%

Estonia7.8%

Other26.0%

Other6.0%


Mineral Fuels33.0%

Food12.1%

Other5.6%


Mineral Fuels24.5%

Food16.9%

Trade Structure



Economic Structure


Exports

Exports

Imports

Imports

-20

0

20

40

60

80

100

1202003-05 2006-08 2009-11

Net Exports

Investment


PrivateConsumption

0

20

40

60

80

1002001-03 2004-06 2007-09

Agriculture

Manufacturing

Other Industry

Services

General Data


Political Data



• Open economic structure • Small domestic market• Sizeable external imbalances• Limited fiscal discipline

.

• EU membership guarantees stable legal system• Adoption of the euro as official currency in January 2015

Energy (2012)Primary Energy Production (trillion Btu): 16.0Primary Energy Consumption (trillion Btu): 308Electricity Generation (billion kW-h): 3.9Electricity Consumption (billion kW-h): 9.7Oil Supply (thousand bpd): 9.1Oil Consumption (thousand bpd): 72.7CO2 Emmissions (million metric tons): 16.7

Agency Rating OutlookMoody’s: Baa1 PositiveS&P: A- StableFitch Ratings: A- Stable


Transportation (2013) Airports: 61Railways (km): 1,767Roadways (km): 84,166Waterways (km): 441Chief Ports: Klaipeda

Official name: Republic of LithuaniaCapital: Vilnius (0.8m)Other cities: Kaunas (0.6m)Area (km2): 65,300Population (million, 2014 est.): 3.0Population density (per km2, 2014): 45.3Population growth rate (%, 2014 est.): -0.3Life expectancy (years, 2014 est.): 76.0Illiteracy rate (%, 2011): 0.3Language: Lithuanian, Russian

and PolishMeasures: Metric systemTime: GMT+2

Prime Minister: Algirdas ButkevičiusLast elections: 14 October 2012Next elections: 2016Central Bank President: Vitas Vasiliauskas

FOCUSECONOMICS Poland


April 2015

Poland

REAL SECTOR | Manufacturing PMI drops again in March, but remains entrenched in expansionary territoryThe manufacturing Purchasing Managers’ Index (PMI) eased from 55.1 in February to 54.8 in March, according to a release provided by HSBC in collaboration with Markit. Despite March’s minor deterioration, the index still rests comfortably above the 50-threshold that separates expansion from contraction in the manufacturing sector. Moreover, despite having eased somewhat since the peak in January, the average of the index over the first quarter of the year was the highest since Q1 2014.

March’s reading reflected increases in the number of new business, new export orders and employment. As pointed out by Markit, “the volume of new businesses placed with Polish manufacturers rose for the sixth successive month in March. The rate of growth remained strong overall, despite easing to the weakest in 2015 so far.” New export orders grew at a faster rate compared to the previous month, underpinned by a weaker value of the zloty against the

Outlook stable


Cecilia SimkievichEconomist

Poland

2011-13 2014-16 2017-19Population (million): 38.5 38.5 38.5GDP (EUR bn): 387 434 531GDP per capita (EUR): 10,030 11,268 13,793GDP growth (%): 2.8 3.4 3.6Fiscal Balance (% of GDP): -4.2 -2.9 -1.8Public Debt (% of GDP) 55.0 48.9 48.3Inflation (%): 2.9 0.5 2.4Current Account (% of GDP): -3.3 -1.4 -2.0External Debt (% of GDP): 69.4 66.8 59.7

After increasing 3.3% in 2014, recent indicators suggest that the Polish economy has remained strong during the first months of 2015. Industrial activity accelerated in February and, despite some moderation, the manufacturing PMI remained firmly entrenched in expansionary territory in March. Meanwhile, the first round of presidential elections will take place on 10 May. Recent polls point to another mandate for the ruling Civic Platform (PO) party. Although President Komorowski’s approval ratings have deteriorated in recent months, he is still well ahead of Andrzej Duda, candidate for the opposition Law and Justice (PiS) party. The outcome of the parliamentary election slated for the last quarter of the year is more uncertain. Although polls suggest that opposition PiS could get the largest share of votes, it is very unlikely that the party will have enough seats to rule alone, and it is still not clear which parties would be willing to form a governing coalition led by PiS.

Poland’s economic prospects remain fairly bright. Private consumption will continue to support growth this year, underpinned by labor market improvements and real wage increases. Polish exports are also expected to benefit from a strengthened German economy. FocusEconomics Consensus Forecast panelists expect the economy to expand 3.3% in 2015, which is unchanged from last month’s forecast. For 2016, the panel sees economic growth picking up to 3.5%.

Consumer prices declined 1.6% annually in February, which was down from January’s 1.4% drop and marked an all-time low. FocusEconomics panelists expect consumer prices to decline 0.3% in 2015. For 2016, the panel sees inflation picking up to 1.7%.


Note: HSBC Manufacturing PMI. Readings above 50 indicate an expansion in the manufacturing sector while readings below 50 indicate a contraction.Source: HSBC and Markit.

45

50

55

60




April 2015

dollar. The rate of job creation accelerated for the fourth consecutive month in a row and reached the highest print in the survey history in March.

FocusEconomics Consensus Forecast panelists expect fixed investment to expand 6.2% in 2015, which is up 0.1 percentage points from last month’s estimate. For 2016, the panel sees fixed investment expanding 5.5%.

The Central Bank expects GDP to grow between 2.7% and 4.2% in 2015, and between 2.2% and 4.4% in 2016. FocusEconomics Consensus Forecast panelists expect that the economy will expand 3.3% in 2015, which is unchanged from the previous month’s forecast. For 2016, panelists expect the economy to grow 3.5%.

REAL SECTOR | Industrial production accelerates in February In February, industrial production expanded 4.9% over the same month of last year, which was well above the mild 1.6% increase tallied in January. February’s reading overshot the 4.0% rise that the markets had expected. The print reflected improvements in manufacturing, as well as in the electricity, gas and steam sector. Conversely, mining and quarrying, as well as water supply, performed worse than in the previous month.

On a month-on-month basis, industrial production increased 1.3% in February, which contrasted January’s 3.1% contraction. Despite February’s improved performance, the overall trend pointed downward, with annual average growth in industrial production edging down from 3.3% in January to 3.2% in February.

FocusEconomics Consensus Forecast panelists expect industrial production to increase 4.9% in 2015, which is down 0.2 percentage points from last month’s forecast. For 2016, the panel expects growth in industrial production to accelerate to 5.5%.

REAL SECTOR | Retail sales drop in February In February, retail sales dropped 1.3% over the same month of last year, which contrasted the 0.1% rise tallied in January and undershot the flat reading that the markets had expected. February’s print marked the lowest reading in over two years. The decrease reflected lower sales for all categories that comprise the index except for fuels, which registered a mild increase compared to the same month of last year. Clothing and footwear as well as and motor vehicles recorded the largest decreases in retail sales.

As a result of February’s fall, annual average growth in retail sales continued on the downward trend that began in May 2014. Annual average growth declined from 2.7% in January to 2.1% in February, which marked the lowest reading in over a year.

FocusEconomics Consensus Forecast panelists see private consumption growing 3.2% in 2015, which is unchanged from last month’s forecast. For 2016, the panel sees private consumption expanding 3.4%.

OUTLOOK | Business confidence hits nine-month high in MarchThe general business climate index increased from 3.5 points in February to 6.3 points in March, according to the Central Statistical Office’s Business Tendency Survey (GUS-BTS). March’s result marked the highest reading


Note: Year-on-year changes and annual average variation of industrial production index in %.Source: Central Statistical Office (GUS) and FocusEconomics calculations.

-5

0

5

10



%

Retail Sales | variation in %

Note: Year-on-year and annual average variation in %.Source: Central Statistical Office (GUS) and FocusEconomics calculations.

-4

0

4

8

12



%



April 2015

in nine months. Business confidence is comfortably above the zero-point threshold that separates pessimism from optimism.

March’s notable increase reflected an improvement in firms’ expectations for the general economic situation in the next 12 months, as well as for their own financial situations. Expectations for future production as well as for domestic and foreign order books also improved significantly. Firms’ outlook regarding employment prospects reached the highest point in ten months.

MONETARY SECTOR | Consumer prices hit an all-time low in February In February, consumer prices fell 0.2% over the previous month, which mirrored the result recorded in the previous month. The reading was just below the flat reading that the markets had expected. According to the Central Statistical Office (GUS), February’s decline mainly reflected lower prices for transport, as well as for clothing and footwear. Conversely, prices for food and beverages were higher than in the previous month.

Consumer prices dropped 1.6% annually in February, which was down from the 1.4% drop tallied in January and marked an all-time low. As a result, inflation continues to move further away from the Central Bank’s target of 2.5%, with a tolerance margin of plus/minus 1.0 percentage points. Meanwhile, the core consumer price index, which excludes food and energy prices, recorded a flat reading in February compared to the previous month. Despite the slight improvement, annual core inflation inched down from January’s 0.6% to 0.4% in February.

The Central Bank sees annual variation in consumer prices between minus 1.0% and 0.0% in 2015, and between minus 0.1% and plus 1.8% in 2016. FocusEconomics Consensus Forecast panelists expect consumer prices to drop 0.3% in 2015, which is down 0.4 percentage points from last month’s projection. For 2016, the panel expects inflation to pick up to 1.7%.


Note: Annual and monthly variation of consumer price index in %.Source: Central Statistical Office (GUS).

-2.0

0.0

2.0

4.0

6.0

-0.6

-0.3

0.0

0.3

0.6




%%

Business Confidence Index

Note: Value of month-on-month business confidence index. An index value above 0 indicates a positive assessment of the business climate while a value below 0 indicates a negative assessment.Source: Central Statistical Office (GUS).

-15

-10

-5

0

5

10




April 2015


Annual Data 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019Real Sector Population (million) 38.2 38.5 38.5 38.5 38.5 38.5 38.5 38.5 38.5 38.5GDP per capita (USD) 12,483 13,597 12,883 13,652 14,178 11,936 12,595 14,021 15,795 17,657GDP (USD bn) 476 524 496 526 546 460 485 540 608 680GDP per capita (EUR) 9,433 9,784 10,026 10,281 10,692 11,187 11,925 12,770 13,742 14,866GDP (EUR bn) 360 377 386 396 412 431 460 492 529 572GDP (PLN bn) 1,437 1,554 1,616 1,662 1,725 1,778 1,870 1,974 2,096 2,226Economic Growth (Nominal GDP, ann. var. in %) 5.5 8.1 4.0 2.9 3.8 3.1 5.2 5.6 6.2 6.2Economic Growth (GDP, annual var. in %) 3.6 4.8 1.9 1.7 3.3 3.3 3.5 3.5 3.7 3.7Domestic Demand (annual var. in %) 4.2 3.8 -0.4 0.2 4.6 3.6 3.6 3.9 4.0 4.2Private Consumption (annual var. in %) 2.5 3.0 1.0 1.1 3.1 3.2 3.4 3.4 3.6 3.6Government Consumption (ann. var. in %) 3.4 -2.3 0.2 2.0 2.8 - - - - -Fixed Investment (annual var. in %) -0.4 9.3 -1.5 1.7 9.5 6.2 5.5 5.0 5.0 4.9Industrial Production (annual var. in %) 11.1 6.8 1.4 2.4 3.5 4.9 5.5 5.2 5.0 4.7Retail Sales (annual variation in %) 5.7 11.2 6.4 2.4 3.1 4.3 8.0 7.6 7.4 6.9Unemployment (% of active population, eop) 12.4 12.5 13.4 13.4 11.5 10.9 10.3 10.1 9.5 9.3Fiscal Balance (% of GDP) -7.6 -4.9 -3.7 -4.0 -3.4 -2.8 -2.5 -2.3 -1.7 -1.4Public Debt (% of GDP) 53.6 54.8 54.4 55.7 48.2 49.4 49.2 49.3 48.1 47.6Monetary and Financial Sector Money (annual variation of M2 in %) 8.4 11.5 4.2 6.7 8.8 - - - - -Inflation (CPI, annual variation in %, aop) 2.6 4.3 3.7 0.9 0.0 -0.3 1.7 2.1 2.4 2.5Inflation (Core, annual variation in %, eop) 1.6 3.1 1.4 1.0 0.5 - - - - -Inflation (HICP annual variation in %, aop) 2.7 3.9 3.7 0.8 0.1 - - - - -Inflation (PPI, annual variation in %, eop) 6.2 8.4 -1.0 -0.9 -2.6 - - - - -NBP Reference Rate (%, eop) 3.50 4.50 4.25 2.50 2.00 1.55 2.07 2.96 3.34 3.573-Month WIBOR (%, eop) 3.85 4.89 4.01 2.61 1.96 1.85 2.45 3.24 3.76 4.0110-Year Bond Yield (%, eop) 6.07 5.91 3.73 4.34 2.54 2.68 3.43 4.01 4.63 4.76Stock Market (variation of WIG in %) 18.8 -20.8 26.2 8.1 0.3 - - - - -Exchange Rate (PLN per USD, eop) 2.97 3.45 3.09 3.02 3.54 3.96 3.77 3.54 3.35 3.20Exchange Rate (PLN per USD, aop) 3.02 2.97 3.26 3.16 3.16 3.86 3.85 3.65 3.45 3.27Exchange Rate (PLN per EUR, eop) 3.97 4.47 4.08 4.15 4.29 4.11 4.03 4.00 3.92 3.85Exchange Rate (PLN per EUR, aop) 3.99 4.12 4.18 4.20 4.19 4.12 4.07 4.01 3.96 3.89External Sector Current Account Balance (% of GDP) -5.5 -5.2 -3.5 -1.3 -1.4 -1.3 -1.6 -2.0 -2.0 -2.1Current Account Balance (EUR bn) -19.7 -19.4 -13.7 -5.3 -6.0 -5.6 -7.3 -9.7 -10.4 -12.1Merchandise Trade Balance (EUR bn) -10.4 -12.5 -7.2 0.6 -0.7 0.9 -0.4 -2.7 -5.4 -8.1Merchandise Exports (EUR bn) 117.9 132.2 140.8 148.8 157.5 176.6 190.0 205.0 222.2 241.7Merchandise Imports (EUR bn) 128.3 144.7 148.0 148.2 158.2 175.8 190.3 207.7 227.6 249.8Merchandise Exports (annual variation in %) 16.0 12.1 6.5 5.7 5.8 12.2 7.5 7.9 8.4 8.8Merchandise Imports (annual variation in %) 19.8 12.7 2.3 0.2 6.7 11.1 8.3 9.1 9.6 9.8International Reserves (EUR bn) 70.0 75.7 82.6 77.1 82.6 92.8 93.8 99.0 106.1 110.2International Reserves (months of imports) 6.5 6.3 6.7 6.2 6.3 6.3 5.9 5.7 5.6 5.3External Debt (EUR bn) 240 232 285 288 265 301 304 308 317 324External Debt (% of GDP) 66.7 61.6 73.8 72.8 64.3 69.9 66.1 62.6 59.9 56.6 Quarterly Data Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16Economic Growth (GDP, annual var. in %) 3.3 3.1 2.9 3.2 3.4 3.8 3.8 3.5 3.3 3.2Economic Growth (GDP, qoq variation in %) 0.8 0.7 - - - - - - - -Inflation (CPI, annual variation in %, aop) -0.3 -0.7 -1.1 -0.5 -0.1 0.5 1.2 1.7 1.9 2.0NBP Reference Rate (%, eop) 2.50 2.00 1.50 1.54 1.54 1.55 1.58 1.66 1.80 2.073-Month WIBOR (%, eop) 2.18 1.96 1.55 1.78 1.84 1.85 1.96 1.97 2.35 2.4510-Year Bond Yield (%, eop) 2.99 2.54 2.33 2.38 2.48 2.68 2.85 3.10 3.32 3.43Exchange Rate (PLN per USD, eop) 3.31 3.54 3.80 3.89 3.96 3.96 3.89 3.84 3.82 3.77Exchange Rate (PLN per EUR, eop) 4.18 4.29 4.07 4.10 4.11 4.11 4.08 4.06 4.06 4.03 Monthly Data Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15Industrial Production (annual variation in %) 1.8 2.4 -1.9 4.2 1.7 0.3 8.1 1.6 4.9 -Retail Sales (annual variation in %) 1.2 2.1 1.7 1.6 2.3 -0.2 1.8 0.1 -1.3 -Unemployment (% of active population) 12.0 11.8 11.7 11.5 11.3 11.4 11.5 12.0 12.0 11.7Business Confid. Index (0-point threshold) 6.8 4.5 5.1 2.7 2.1 1.7 -2.5 2.0 3.5 6.3HSBC Manufacturing PMI (50-threshold) 50.3 49.4 49.0 49.5 51.2 53.2 52.8 55.2 55.1 54.8Inflation (CPI, mom variation in %) 0.0 -0.2 -0.4 0.0 0.0 -0.2 -0.3 -0.2 -0.2 -Inflation (CPI, annual variation in %) 0.3 -0.2 -0.3 -0.3 -0.6 -0.6 -1.0 -1.4 -1.6 -Exchange Rate (PLN per USD, eop) 3.04 3.12 3.21 3.31 3.38 3.36 3.54 3.70 3.71 3.80Exchange Rate (PLN per EUR, eop) 4.16 4.18 4.21 4.18 4.23 4.19 4.29 4.18 4.15 4.07Merchandise Exports (annual variation in %) 5.7 6.4 -1.2 5.8 4.7 3.5 4.3 5.7 - -



April 2015

0%

20%

40%

60%

80%

< 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 > 5.0


1 | Real GDP | 2000-2019 | var. in %


2 | Real GDP | Q1 12- Q4 16 | var. in % Real GDP growth in %


Notes and sources

Long-term chart period from 2000 to 2019 unless otherwise stated. All real sector data are from the Central Statistical Office (GUS). Forecasts are based on FocusEconomics Consensus Forecast.1 GDP, real annual variation in %. 2 Quarterly GDP (not seasonally adjusted), year-on-year variation in %.3 GDP, evolution of 2015 forecasts during the last 18 months.4 GDP, evolution of 2016 forecasts during the last 18 months.5 GDP, panelist distribution of 2015 forecasts. Concentration of panelists in forecast interval in


Individual Forecasts 2015 2016Bank Zachodni WBK 3.6 3.3BofA Merrill Lynch 3.5 3.7Capital Economics 3.0 3.8Citigroup Global Mkts 3.7 3.7Credit Agricole 3.4 3.2Credit Suisse 3.1 3.3Danske Bank 2.9 3.2DekaBank 3.0 3.6Deutsche Bank 3.4 3.5EIU 3.4 3.6Erste Bank 3.1 3.6Experian 3.2 3.6Frontier Strategy Group 2.9 3.4Goldman Sachs 3.4 3.5HSBC 3.4 3.5ING 3.5 3.8JPMorgan 3.1 3.2KBC 3.6 3.8KUKE S.A. 3.5 4.0Nomura 3.5 3.8Nordea 3.0 3.2Oxford Economics 3.5 3.9PKO Bank Polski 3.6 3.6Raiffeisen Research 3.5 3.4UBS 3.4 3.3UniCredit 3.4 3.5WIIW 3.5 3.2SummaryMinimum 2.9 3.2Maximum 3.7 4.0Median 3.4 3.5Consensus 3.3 3.5History30 days ago 3.3 3.560 days ago 3.3 3.590 days ago 3.2 3.5Additional ForecastsCentral Bank (Mar. 2015) 2.7-4.2 2.2-4.4IMF (Oct. 2014) 3.3 3.5Euro. Comm. (Feb. 2015) 3.2 3.4

-10

-5

0

5

10

2000 2005 2010 2015

PolandEastern EuropeWorld

-1

0

1

2

3

4

Q1 12 Q1 13 Q1 14 Q1 15 Q1 16

PolandEastern EuropeWorld

2

3

4

5



2

3

4

5






April 2015



5.0

5.5

6.0

6.5

7.0


2015 2016


-20

-10

0

10

20

2000 2005 2010 2015

PolandEastern Europe


2.5

3.0

3.5

4.0


2015 2016


-5

0

5

10

2000 2005 2010 2015


Individual Forecasts 2015 2016 2015 2016Bank Zachodni WBK 3.6 3.5 8.8 6.1BofA Merrill Lynch 3.2 4.0 - -Capital Economics 3.3 3.5 5.0 6.0Citigroup Global Mkts 3.0 3.2 6.8 7.2Credit Agricole - - - -Credit Suisse 3.3 3.1 5.4 3.5Danske Bank 3.0 3.1 4.5 3.2DekaBank - - - -Deutsche Bank 3.2 3.3 6.5 6.3EIU 2.5 2.7 5.5 5.3Erste Bank - - - -Experian 3.0 3.0 5.3 4.8Frontier Strategy Group 2.3 2.7 - -Goldman Sachs - - - -HSBC 3.6 3.6 6.5 6.4ING - - - -JPMorgan - - - -KBC - - - -KUKE S.A. 3.0 3.9 4.8 5.6Nomura - - - -Nordea - - - -Oxford Economics 3.9 3.7 6.1 6.0PKO Bank Polski 3.3 3.4 7.2 5.3Raiffeisen Research 3.2 3.5 7.3 4.2UBS 3.5 3.5 5.5 4.5UniCredit 3.5 4.0 5.5 7.2WIIW 3.5 3.5 8.0 7.0SummaryMinimum 2.3 2.7 4.5 3.2Maximum 3.9 4.0 8.8 7.2Median 3.3 3.5 5.8 5.8Consensus 3.2 3.4 6.2 5.5History30 days ago 3.2 3.3 6.1 5.660 days ago 3.2 3.3 6.1 5.790 days ago 3.1 3.3 5.8 5.5

Consumption Investment variation in % variation in %

Notes and sources

Long-term chart period from 2000 to 2019 unless otherwise stated. All real sector data are from Central Statistical Office (GUS). Forecasts are based on FocusEconomics Consensus Forecast.6 Private consumption, annual variation in %. 7 Private consumption, evolution of 2015 and 2016 forecasts during the last 18 months.8 Gross fixed investment, annual variation in %.9 Gross fixed investment, evolution of 2015 and 2016 forecasts during the last 18 months.




April 2015


Individual Forecasts 2015 2016 2015 2016Bank Zachodni WBK 5.2 5.0 10.0 8.0BofA Merrill Lynch - - 10.5 9.5Capital Economics 4.0 6.0 - -Citigroup Global Mkts - - 9.9 9.3Credit Agricole - - - -Credit Suisse - - - -Danske Bank - - 11.9 11.9DekaBank - - - -Deutsche Bank 6.0 6.5 11.3 11.0EIU 4.3 5.0 11.5 10.9Erste Bank - - 11.9 11.7Experian - - - -Frontier Strategy Group 3.0 3.5 11.0 10.9Goldman Sachs - - - -HSBC 4.4 5.2 - -ING - - - -JPMorgan - - - -KBC - - - -KUKE S.A. 7.1 6.7 10.6 10.1Nomura - - - -Nordea - - - -Oxford Economics 4.5 5.3 10.9 10.7PKO Bank Polski 5.3 - 10.5 10.0Raiffeisen Research 6.0 7.0 10.7 9.7UBS 4.5 5.5 11.0 10.5UniCredit - - 10.8 10.2WIIW 4.5 5.0 10.5 10.0SummaryMinimum 3.0 3.5 9.9 8.0Maximum 7.1 7.0 11.9 11.9Median 4.5 5.3 10.8 10.2Consensus 4.9 5.5 10.9 10.3History30 days ago 5.1 5.8 11.2 10.660 days ago 4.8 5.7 11.1 10.590 days ago 4.5 5.6 11.3 10.8


Notes and sources

Long-term chart period from 2000 to 2019 unless otherwise stated. All real sector data are from the Central Statistical Office (GUS). Forecasts are based on FocusEconomics Consensus Forecast.10 Industrial production, annual variation in %.11 Industrial production, evolution of 2015 and 2016 forecasts during the last 18 months.12 Unemployment, % of active population.13 Unemployment, evolution of 2015 and 2016 forecasts during the last 18 months.


-20

-10

0

10

20

2000 2005 2010 2015



4

5

6

7


2015 2016


5

10

15

20

25

2000 2005 2010 2015



10

11

12

13

14


2015 2016



April 2015


48

50

52

54


2015 2016


20

30

40

50

60

2000 2005 2010 2015



-9

-6

-3

0

3

2000 2005 2010 2015



-3.5

-3.0

-2.5

-2.0


2015 2016



Individual Forecasts 2015 2016 2015 2016Bank Zachodni WBK -2.9 -2.2 51.3 51.0BofA Merrill Lynch -2.0 -1.2 49.0 48.0Capital Economics -2.5 -2.3 - -Citigroup Global Mkts -2.9 -2.7 48.0 48.3Credit Agricole - - - -Credit Suisse -3.5 -3.0 49.4 49.8Danske Bank - - - -DekaBank -2.9 -2.7 - -Deutsche Bank -2.9 -2.7 46.7 47.9EIU - - - -Erste Bank -2.9 -2.5 50.1 49.5Experian -3.2 -3.1 - -Frontier Strategy Group - - - -Goldman Sachs - - - -HSBC -2.9 -2.7 49.4 49.5ING - - - -JPMorgan -3.0 -2.8 - -KBC - - - -KUKE S.A. - - - -Nomura -2.8 -2.7 47.0 45.8Nordea -3.0 -2.5 - -Oxford Economics -1.9 -1.6 50.3 49.4PKO Bank Polski -3.4 -3.1 51.0 51.1Raiffeisen Research -2.7 -2.0 50.4 50.3UBS -3.0 -2.5 49.0 48.5UniCredit -2.8 -2.5 49.3 49.0WIIW -2.9 -2.8 50.2 50.1SummaryMinimum -3.5 -3.1 46.7 45.8Maximum -1.9 -1.2 51.3 51.1Median -2.9 -2.7 49.4 49.5Consensus -2.8 -2.5 49.4 49.2History30 days ago -2.8 -2.5 49.6 49.360 days ago -2.8 -2.5 49.5 49.290 days ago -2.8 -2.5 49.5 49.1


Notes and sources




April 2015

0%

20%

40%

60%

< -2.0 -1.5 -1.0 -0.5 0.0 0.5 1.0 1.5 > 1.5


18 | Inflation | 2000 - 2019 | in %


19 | Inflation | Q1 12- Q4 16 | in %


Notes and sources

Long-term chart period from 2000 to 2019 unless otherwise stated. All monetary sector data are from the Central Statistical Office (GUS). Forecasts are based on FocusEconomics Consensus Forecast.18 Inflation, annual variation of consumer price index (CPI) in % (aop).19 Quarterly inflation, annual variation of consumer price index (CPI) in % (aop).20 Inflation, evolution of 2015 forecasts during the last 18 months.21 Inflation, evolution of 2016 forecasts during the last 18 months.22 Inflation, panelist distribution of 2015 forecasts. Concentration of panelists in forecast interval


Individual Forecasts 2015 2016Bank Zachodni WBK -0.7 2.0BofA Merrill Lynch -0.6 1.2Capital Economics -0.5 1.3Citigroup Global Mkts -0.6 2.4Credit Agricole -0.3 1.4Credit Suisse - -Danske Bank -0.3 1.9DekaBank 0.2 2.6Deutsche Bank -0.4 1.5EIU -0.2 2.0Erste Bank -0.3 1.1Experian - -Frontier Strategy Group 0.2 0.8Goldman Sachs -0.5 1.9HSBC -0.5 1.0ING -0.5 1.3JPMorgan -0.5 1.3KBC -0.1 1.6KUKE S.A. -0.2 2.0Nomura -0.1 2.1Nordea 0.3 2.2Oxford Economics -0.3 2.2PKO Bank Polski -0.5 1.5Raiffeisen Research -0.4 1.3UBS 0.0 2.5UniCredit -0.4 1.7WIIW 0.3 1.5SummaryMinimum -0.7 0.8Maximum 0.3 2.6Median -0.3 1.6Consensus -0.3 1.7History30 days ago 0.1 1.860 days ago 0.2 1.890 days ago 0.8 1.9Additional ForecastsCentral Bank (Mar. 2015) -1.0/0.0 -0.1/+1.8IMF (Oct. 2014) 0.8 2.0Euro. Comm. (Feb. 2015) -0.2 1.4



-1

0

1

2

3

4



-10

0

10

20

30

2000 2005 2010 2015


0

1

2

3

4



-5

0

5

10

Q1 12 Q1 13 Q1 14 Q1 15 Q1 16




April 2015

0%

20%

40%

60%

80%

100%

< -0.50 0.00 0.50 1.00 1.50 2.00 2.50 3.00 > 3.00


23 | Interest Rate | 2000 - 2019 | in %


24 | Interest Rate | Q1 12- Q4 16 | in %


Notes and sources

Long-term chart period from 2000 to 2019 unless otherwise stated. All monetary sector data are from the National Bank of Poland (NBP). Forecasts are based on FocusEconomics Consensus Forecast.23 Interest rate, NBP Reference Rate in % (eop).24 Quarterly interest rate, NBP Reference Rate in % (eop).25 Interest rate, evolution of 2015 forecasts during the last 18 months.26 Interest rate, evolution of 2016 forecasts during the last 18 months.27 Interest rate, panelist distribution of 2015 forecasts. Concentration of panelists in forecast


Individual Forecasts 2015 2016Bank Zachodni WBK 1.50 2.50BofA Merrill Lynch 1.50 1.50Capital Economics 1.50 1.50Citigroup Global Mkts 1.50 2.25Credit Agricole 1.50 1.75Credit Suisse - -Danske Bank 1.25 -DekaBank 1.50 2.00Deutsche Bank 1.50 -EIU - -Erste Bank - -Experian - -Frontier Strategy Group - -Goldman Sachs 1.50 2.25HSBC 1.50 1.50ING 1.50 1.75JPMorgan 1.50 1.50KBC 1.50 -KUKE S.A. 2.00 3.00Nomura 1.50 2.50Nordea 1.50 2.50Oxford Economics - -PKO Bank Polski 1.50 2.25Raiffeisen Research 1.50 1.56UBS 2.00 3.00UniCredit 1.50 2.00WIIW 1.80 2.00SummaryMinimum 1.25 1.50Maximum 2.00 3.00Median 1.50 2.00Consensus 1.55 2.07History30 days ago 1.59 2.3260 days ago 1.83 2.5590 days ago 1.95 2.72


Interest Rate | NBP Reference Rate

1

2

3

4

5



0

10

20

30

40

2000 2005 2010 2015


1

2

3

4

5



1

3

5

7

9

11

Q1 12 Q1 13 Q1 14 Q1 15 Q1 16




April 2015

0%

20%

40%

60%

< 3.75 3.85 3.95 4.05 4.15 4.25 4.35 4.45 > 4.45


28 | Exchange Rate | PLN per EUR

30 | PLN per EUR 2015 | evol. of fcst

29 | Exchange Rate | PLN per EUR

31 | PLN per EUR 2016 | evol. of fcst

Notes and sources

Long-term chart period from 2000 to 2019 unless otherwise stated. All monetary sector data are from Thomson Reuters. Forecasts based on FocusEconomics Consensus Forecast.28 Exchange rate, PLN per EUR (eop).29 Quarterly exchange rate, PLN per EUR (eop).30 Exchange rate, evolution of 2015 forecast during the last 18 months.31 Exchange rate, evolution of 2016 forecast during the last 18 months.32 Exchange rate, panelist distribution of 2015 forecasts. Concentration of panelists in forecast


Individual Forecasts 2015 2016Bank Zachodni WBK 3.96 4.19BofA Merrill Lynch 4.20 4.20Capital Economics 4.10 3.90Citigroup Global Mkts 4.19 4.11Credit Agricole 4.15 4.00Credit Suisse 4.20 4.20Danske Bank 4.10 -DekaBank 4.10 3.90Deutsche Bank 4.08 -EIU 4.14 4.19Erste Bank - -Experian - -Frontier Strategy Group - -Goldman Sachs 4.14 4.10HSBC 4.05 4.05ING 3.95 3.80JPMorgan - -KBC 3.95 -KUKE S.A. 4.07 3.95Nomura 4.10 3.80Nordea 4.20 4.00Oxford Economics 4.13 4.03PKO Bank Polski 4.18 4.05Raiffeisen Research 4.15 3.95UBS 4.05 3.90UniCredit 4.20 4.08WIIW 4.15 4.20SummaryMinimum 3.95 3.80Maximum 4.20 4.20Median 4.13 4.04Consensus 4.11 4.03History30 days ago 4.13 4.0260 days ago 4.13 4.0090 days ago 4.12 4.02

32 | PLN per EUR 2015 | Panelist Distribution

Exchange Rate | PLN per EUR

3.6

3.8

4.0

4.2

4.4



3.5

4.0

4.5

5.0

2000 2005 2010 2015

3.4

3.8

4.2

4.6



4.0

4.1

4.2

4.3

4.4

Q1 12 Q1 13 Q1 14 Q1 15 Q1 16



April 2015


-6

-4

-2

0

2


2015 2016


-100

0

100

200

300

2000 2005 2010 2015



-10

-5

0

5

2000 2005 2010 2015



-3.0

-2.5

-2.0

-1.5

-1.0


2015 2016



Individual Forecasts 2015 2016 2015 2016Bank Zachodni WBK -1.4 -1.1 -0.5 -3.6BofA Merrill Lynch - - 2.9 5.1Capital Economics -0.5 -0.8 - -Citigroup Global Mkts -0.8 -1.5 - -Credit Agricole -1.7 -2.7 - -Credit Suisse -1.9 -1.1 - -Danske Bank -1.8 -2.4 - -DekaBank -2.3 -2.0 - -Deutsche Bank -1.3 -1.5 -0.4 -1.7EIU -1.2 -1.7 0.8 -0.2Erste Bank -1.6 -2.4 - -Experian -1.1 -1.0 - -Frontier Strategy Group - - - -Goldman Sachs -1.2 -1.9 - -HSBC -0.3 -0.2 - -ING - - - -JPMorgan -0.8 -1.0 - -KBC - - - -KUKE S.A. -1.7 -1.4 -0.9 -0.8Nomura -1.5 -2.5 - -Nordea -1.5 -1.8 - -Oxford Economics -0.8 -1.0 2.3 1.7PKO Bank Polski -0.5 -1.3 4.3 2.1Raiffeisen Research -1.5 -2.0 0.1 -3.3UBS -1.2 -1.2 - -UniCredit -1.4 -1.6 - -WIIW -2.0 -2.5 -0.9 -2.7SummaryMinimum -2.3 -2.7 -0.9 -3.6Maximum -0.3 -0.2 4.3 5.1Median -1.4 -1.5 0.1 -0.8Consensus -1.3 -1.6 0.9 -0.4History30 days ago -1.5 -1.7 1.1 -0.260 days ago -1.4 -1.7 1.2 0.190 days ago -1.8 -2.1 -0.4 -1.9


Notes and sources

Long-term chart period from 2000 to 2019 unless otherwise stated. All external sector data are from the National Bank of Poland (NBP). Forecasts based on FocusEconomics Consensus Forecast.33 Current account balance, as % of GDP. 34 Current account balance, evolution of 2015 and 2016 forecasts during the last 18 months.35 Trade balance, exports and imports, in EUR. 36 Trade balance, evolution of 2015 and 2016 forecasts during the last 18 months.



April 2015


Exports and Imports

Individual Forecasts 2015 2016 2015 2016Bank Zachodni WBK 172 189 173 193BofA Merrill Lynch 207 221 204 216Capital Economics - - - -Citigroup Global Mkts - - - -Credit Agricole - - - -Credit Suisse - - - -Danske Bank - - - -DekaBank - - - -Deutsche Bank 175 174 175 176EIU 189 213 188 213Erste Bank - - - -Experian - - - -Frontier Strategy Group - - - -Goldman Sachs - - - -HSBC - - - -ING - - - -JPMorgan - - - -KBC - - - -KUKE S.A. 172 192 173 193Nomura - - - -Nordea - - - -Oxford Economics 167 184 165 183PKO Bank Polski 167 175 163 173Raiffeisen Research 172 183 172 186UBS - - - -UniCredit - - - -WIIW 169 179 170 182SummaryMinimum 167 174 163 173Maximum 207 221 204 216Median 172 184 173 186Consensus 177 190 176 190History30 days ago 170 185 169 18560 days ago 170 186 169 18590 days ago 170 185 170 187


Notes and sources

Long-term chart period from 2000 to 2019 unless otherwise stated. All external sector data are from the National Bank of Poland (NBP). Forecasts based on FocusEconomics Consensus Forecast.37 Exports, annual variation in %. 38 Exports, evolution of 2015 and 2016 forecasts during the last 18 months.39 Imports, annual variation in %. 40 Imports, evolution of 2015 and 2016 forecasts during the last 18 months.

150

175

200

225


2015 2016


-40

-20

0

20

40

2000 2005 2010 2015



-40

-20

0

20

40

2000 2005 2010 2015



160

180

200

220


2015 2016




April 2015


290

300

310

320

330

340


2015 2016


20

40

60

80

2000 2005 2010 2015

Poland

Eastern Europe


3

6

9

12

2000 2005 2010 2015



80

90

100

110

120


2015 2016



Individual Forecasts 2015 2016 2015 2016Bank Zachodni WBK - - - -BofA Merrill Lynch 91.2 96.8 - -Capital Economics - - - -Citigroup Global Mkts - - - -Credit Agricole - - - -Credit Suisse - - 296 296Danske Bank - - - -DekaBank - - - -Deutsche Bank 94.6 96.1 - -EIU 99.7 99.2 - -Erste Bank - - - -Experian - - - -Frontier Strategy Group - - - -Goldman Sachs - - - -HSBC 97.0 99.0 - -ING - - - -JPMorgan - - - -KBC - - - -KUKE S.A. 89.4 96.5 311 325Nomura 87.0 85.0 - -Nordea - - - -Oxford Economics 104.6 111.0 - -PKO Bank Polski - - 288 286Raiffeisen Research 85.0 78.0 300 316UBS - - - -UniCredit 96.9 90.7 312 291WIIW 83.0 86.0 303 310SummaryMinimum 83.0 78.0 288 286Maximum 104.6 111.0 312 325Median 92.9 96.3 302 303Consensus 92.8 93.8 301 304History30 days ago 82.8 82.6 311 31060 days ago 82.0 81.8 310 31090 days ago 85.2 87.1 298 305


Notes and sources

Long-term chart period from 2000 to 2019 unless otherwise stated. All external sector data are from the National Bank of Poland (NBP). Forecasts are based on FocusEconomics Consensus Forecast.41 International reserves, months of imports. 42 International reserves, evolution of 2015 and 2016 forecasts during the last 18 months.43 External debt as % of GDP.44 External debt, evolution of 2015 and 2016 forecasts during the last 18 months.



April 2015

Fact Sheet

Poland in the Region


Poland 12.4%

Russia 45.9%

Turkey 18.1%

Czech Republic

4.7%

Romania 4.5%

Other14.4%

Poland 10.4%

Russia 38.8%

Turkey 20.9%

Ukraine 12.2%

Romania 5.4%

Other12.3%

Russia12.0%

Other EU-27

32.2%

Germany27.4%

Netherlands5.9%

Italy5.4%

China5.3%

Other11.7%

Russia5.1%

Other EU-27

33.1%

Germany26.0%

U.K.7.0%

Czech Rep.6.5%

Other22.3%

Other7.9%


Mineral Fuels12.5%

Food7.9%

Other10.8%


Food11.2%

Trade Structure



Economic Structure


Exports

Exports

Imports

Imports

-20

0

20

40

60

80

100

1202004-06 2007-09 2010-12

Net Exports

Investment


PrivateConsumption

0

20

40

60

80

1002002-04 2005-07 2008-10

Agriculture

Manufacturing

Other Industry

Services

General Data


Political Data



• Sizeable domestic market • Large fiscal deficit

• Well-educated labor force

• Mass emigration of workers has caused labor shortages in some sectors

• Commitment to joining Euro area

Energy (2012)Primary Energy Production (trillion Btu): 2,694Primary Energy Consumption (trillion Btu): 3,905Electricity Generation (billion kW-h): 153Electricity Consumption (billion kW-h): 139Oil Supply (thousand bpd): 27.7Oil Consumption (thousand bpd): 527CO2 Emmissions (million metric tons): 289

Agency Rating OutlookMoody’s: A2 StableS&P: A- PositiveFitch Ratings: A- Stable


Transportation (2013) Airports: 126Railways (km): 19,428Roadways (km): 412,035Waterways (km): 3,997Chief Ports: Gdansk, Gdynia

Official name: Republic of PolandCapital: Warsaw (3.3m)Other cities: Katowice (3.5m)

Krakow (1.4m)Gdansk (1.3m)

Area (km2): 312,685Population (million, 2014 est.): 38.5Population density (per km2, 2014): 123Population growth rate (%, 2014 est.): -0.1Life expectancy (years, 2014 est.): 76.7Illiteracy rate (%, 2011): 0.3Language: PolishMeasures: Metric SystemTime: GMT+1

Prime Minister: Ewa KopaczLast elections: 22 September 2014Next elections: October 2015Central Bank President: Marek Belka

FOCUSECONOMICS Romania


April 2015

Romania

REAL SECTOR | Industrial production accelerates in FebruaryIndustrial output increased 3.2% in February over the same month last year, which came in above January’s mild 1.5% rise and marked the highest print since October 2014. According to the National Institute of Statistics, February’s rise was mainly the result of strong growth in the manufacturing sector.

On a month-on-month basis, industrial production recorded flat growth in February, which was down from the 1.1% rise tallied in the previous month. As a result, annual average growth in industrial production decreased markedly from 5.5% in January to 4.9% in February.

FocusEconomics Consensus Forecast panelists expect industrial production to expand 5.3% in 2015, which is up 0.1 percentage points from last month’s estimate. The panel estimates that industrial output will increase 5.7% in 2016.

The government expects GDP to expand 2.5% in 2015. FocusEconomics Consensus Forecast panelists expect the economy to grow 2.9% in 2015,

The Romanian economy grew a healthy 2.8% last year, and a strong pick-up in industrial activity in February suggests that growth momentum has carried over into 2015. However, the economy is currently suffering from delays in several private investment projects following recent corruption scandals that involve top government officials. Finance Minister Darius Valcov resigned on 15 March after having been accused of accepting massive bribes. The newly-appointed Finance Minister and former EU funds Minister, Eugen Teodorovici, was sworn in on 30 March amid a difficult political environment. Teodorovici will have to face tough negotiations with the IMF, which delayed the third review of a EUR 4 billion aid deal due to disagreements with the government last February. In particular, the new Minister will encounter difficulties in convincing the IMF of the efficacy of the government’s recently-announced tax-cutting plans. The IMF has already stated that the planned tax reductions will undermine years of prudent fiscal policy and pose a threat to fiscal consolidation going forward.

Romania’s economic outlook remains fairly stable. However, recent corruption scandals and the ongoing delay in the third review of the IMF’s aid deal are weighing on investor confidence and posing downside risks to growth. FocusEconomics panelists expect the economy to expand 2.9% in 2015, which is unchanged from last month’s forecast. For 2016, the panel sees growth rising to 3.1%.

Annual inflation rose from 0.4% in February to 0.8% in March. At its 31 March meeting, the Central Bank decided to cut the monetary policy rate to an all-time low of 2.00%. FocusEconomics panelists foresee inflation ending 2015 at 1.7% and 2016 at 2.2%.

Outlook stable


Cecilia SimkievichEconomist

Romania

2011-13 2014-16 2017-19Population (million): 21.3 19.8 19.5GDP (EUR bn): 137 158 189GDP per capita (EUR): 6,423 7,976 9,668GDP growth (%): 1.7 2.9 3.2Fiscal Balance (% of GDP): -3.6 -2.0 -1.8Public Debt (% of GDP) 36.5 39.0 37.3Inflation (%): 3.2 1.6 2.5Current Account (% of GDP): -3.4 -0.9 -2.6External Debt (% of GDP): 72.3 61.5 56.5


Note: Year-on-year changes and annual average variation of industrial production index in %.Source: National Institute of Statistics.

-5.0

0.0

5.0

10.0

15.0



%



April 2015

which is unchanged over the previous month’s projection. For 2016, the panel expects the economy to expand 3.1%.

MONETARY SECTOR | Inflation gains ground in MarchIn March, consumer prices rose 0.41% over the previous month, which came in slightly above the 0.33% increase observed in February. According to the National Institute of Statistics (INSSE), March’s result reflected higher prices for all the subcomponents that comprise the index. The non-food products category registered the highest price increase.

Annual headline inflation increased from 0.4% in February to 0.8% in March. February’s result had marked an all-time low. Inflation is still well below the Central Bank’s tolerance margin of plus/minus 1.0% around its target of 2.5%. Annual average inflation inched down from February’s 1.0% to 0.9% in March, marking a multi-year low.

The Central Bank foresees inflation of 2.1% in 2015 and 2.4% in 2016. FocusEconomics Consensus Forecast panelists see inflation at 1.7% by the end of 2015, which is down 0.3 percentage points from last month’s forecast. For 2016, panelists forecast inflation at 2.2%.

MONETARY SECTOR | Central Bank cuts policy rate to an all-time lowAt its 31 March meeting, the National Bank of Romania (NBR) decided to reduce the monetary policy rate from 2.25% to 2.00%, which marks an all-time low. The decision came as a surprise to the markets, which had expected the rate to remain unchanged at 2.25%. In addition, the Board decided to narrow the symmetrical corridor of interest rates on the NBR’s standing facilities around the policy rate to plus/minus 1.75% from plus/minus 2.00%. As a result, starting 1 April, the interest rate on the NBR’s lending facility (Lombard) was lowered to 3.75% from 4.25%, while the deposit facility rate was kept unchanged at 0.25%. The Bank decided to leave unchanged the current levels of minimum reserve requirements ratios on both leu- and foreign currency-denominated liabilities of credit institutions.

In its accompanying statement, the Central Bank pointed out that the economy gained momentum in the fourth quarter of last year on the back of rising final consumption and strong fixed investment, which contributed positively to GDP growth for the first time in two years. The Board commented that monthly economic indicators suggest that the positive trend has continued during 2015 thus far. Regarding price developments, annual inflation in February remained unchanged at January’s 0.4%.

Against this backdrop, the Committee commented that, “the Board of the National Bank of Romania decided to lower the monetary policy rate to 2.00 percent per annum from 2.25 percent starting 1 April 2015 and to continue to pursue adequate liquidity management in the banking system.”

FocusEconomics Consensus Forecast panelists expect the policy rate to end 2015 at 1.98%. For 2016, the panel foresees the rate closing the year at 2.55%.


Note: Year-on-year and month-on-month variation of consumer price index in %.Source: National Institute of Statistics.

0.0

2.5

5.0

7.5

-1.0

0.0

1.0

2.0




%%

Central Bank Reference Rate | in %

Note: National Bank of Romania reference rate in %.Source: National Bank of Romania (NBR).

0.0

3.0

6.0

9.0

Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15

%



April 2015


Annual Data 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019Real Sector Population (million) 21.4 21.4 21.3 21.3 19.9 19.8 19.7 19.6 19.5 19.4GDP per capita (USD) 7,726 8,662 7,954 8,996 9,974 8,464 8,944 9,906 11,070 12,296GDP (USD bn) 166 185 170 191 199 168 176 194 216 239GDP per capita (EUR) 5,901 6,214 6,262 6,792 7,527 7,933 8,467 9,021 9,631 10,352GDP (EUR bn) 127 133 134 145 150 157 167 177 188 201GDP (RON bn) 534 565 597 638 667 689 724 764 807 854Economic Growth (Nominal GDP, ann. var. in %) 4.6 5.8 5.6 6.9 4.6 4.0 5.2 5.5 5.6 5.8Economic Growth (GDP, annual var. in %) -0.8 1.1 0.6 3.4 2.8 2.9 3.1 3.2 3.2 3.3Private Consumption (annual var. in %) 1.0 1.0 0.8 1.1 4.5 3.5 3.4 3.1 2.8 2.7Government Consumption (annual var. in %) -12.3 -2.7 -5.6 14.0 13.6 - - - - -Fixed Investment (annual var. in %) -5.8 2.9 0.6 -9.2 -3.3 3.7 4.5 4.4 3.9 3.9Industrial Production (annual var. in %) 5.5 7.8 2.4 7.9 6.2 5.3 5.7 4.8 4.4 4.1Retail Sales (annual variation in %) -7.0 -1.2 4.1 0.5 6.4 2.8 3.1 2.9 2.9 2.8Unemployment (% of active population, aop) 7.0 7.1 6.9 7.1 6.8 6.6 6.3 6.0 5.8 5.8Fiscal Balance (% of GDP) -6.6 -5.5 -3.0 -2.2 -2.0 -2.1 -2.0 -1.9 -1.9 -1.7Public Debt (% of GDP) 29.9 34.2 37.3 37.9 38.7 39.0 39.3 37.8 37.5 36.6Monetary and Financial Sector Money (ann. var. of M2 in %) 6.2 6.3 4.6 8.8 8.2 - - - - -Inflation (CPI, annual variation in %, eop) 8.0 3.1 5.0 1.6 0.8 1.7 2.2 2.4 2.5 2.5Inflation (Core, annual variation in %, eop) 6.2 2.8 3.5 0.7 1.7 - - - - -Inflation (HICP, annual variation in %, aop) 6.1 5.8 3.4 3.2 1.4 - - - - -Inflation (PPI, annual variation in %, eop) 7.0 6.0 4.8 -0.1 -1.4 - - - - -NBR Reference Rate (%, eop) 6.25 6.00 5.25 4.00 2.75 1.98 2.55 3.55 3.83 4.00Stock Market (BET variation in %) 124.8 12.0 -13.8 12.1 16.4 - - - - -Exchange Rate (RON per USD, eop) 3.20 3.34 3.36 3.26 3.69 4.21 4.06 3.85 3.67 3.53Exchange Rate (RON per USD, aop) 3.18 3.05 3.47 3.33 3.35 4.13 4.13 3.96 3.76 3.60Exchange Rate (RON per EUR, eop) 4.28 4.32 4.43 4.48 4.48 4.37 4.35 4.34 4.30 4.25Exchange Rate (RON per EUR, aop) 4.21 4.24 4.46 4.42 4.44 4.41 4.36 4.34 4.32 4.27External Sector Current Account Balance (% of GDP) -4.6 -4.7 -4.6 -0.8 -0.4 -0.9 -1.3 -2.4 -2.7 -2.9Current Account Balance (EUR bn) -5.8 -6.2 -6.1 -1.2 -0.6 -1.5 -2.2 -4.2 -5.1 -5.8Merchandise Trade Balance (EUR bn) -9.5 -9.7 -9.6 -5.7 -6.0 -6.1 -6.6 -7.5 -8.1 -9.0Merchandise Exports (EUR bn) 37.4 45.3 45.1 49.6 52.5 54.5 59.2 63.9 68.5 72.7Merchandise Imports (EUR bn) 46.9 54.9 54.7 55.3 58.5 60.6 65.8 71.5 76.6 81.7Merchandise Exports (annual variation in %) 28.5 21.1 -0.4 10.0 5.8 3.9 8.6 7.9 7.2 6.1Merchandise Imports (annual variation in %) 20.3 17.1 -0.4 1.1 5.8 3.6 8.6 8.6 7.2 6.6International Reserves (EUR bn) 32.4 33.2 31.2 32.5 32.2 33.7 35.4 36.8 38.6 39.8International Reserves (months of imports) 8.3 7.3 6.8 7.1 6.6 6.7 6.5 6.2 6.0 5.9External Debt (EUR bn) 92.5 98.7 99.7 98.1 94.3 97.1 100.0 104.9 106.7 107.4External Debt (% of GDP) 73.1 74.3 74.6 67.9 62.9 61.7 59.9 59.3 56.7 53.4 Quarterly Data Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16Economic Growth (GDP, annual var. in %) 3.0 2.7 2.8 2.9 2.9 2.9 2.9 2.9 3.1 3.2Economic Growth (GDP, qoq variation in %) 2.1 0.7 - - - - - - - -Inflation (CPI, annual variation in %, eop) 1.5 0.8 0.8 1.2 1.5 1.7 2.1 2.2 2.2 2.2NBR Reference Rate (%, eop) 3.25 2.75 2.25 1.93 1.93 1.98 2.05 2.20 2.40 2.55Exchange Rate (RON per USD, eop) 3.50 3.69 4.11 4.18 4.23 4.21 4.16 4.13 4.10 4.06Exchange Rate (RON per EUR, eop) 4.41 4.48 4.41 4.40 4.39 4.37 4.37 4.37 4.36 4.35 Monthly Data Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15Industrial Production (annual variation in %) 10.4 5.6 0.0 6.4 4.3 0.3 3.1 1.5 3.2 -Retail Sales (annual variation in %) 9.0 5.3 4.1 4.7 3.8 5.9 6.4 6.3 3.2 -Unemployment (% of active population) 6.8 6.8 6.7 6.7 6.7 6.6 6.6 6.6 6.5 -Inflation (CPI, mom variation in %) -0.27 -0.05 -0.31 0.12 0.19 -0.19 -0.10 0.43 0.33 0.41Inflation (CPI, annual variation in %) 0.7 1.0 0.8 1.5 1.4 1.3 0.8 0.4 0.4 0.8Exchange Rate (RON per USD, eop) 3.21 3.30 3.35 3.50 3.51 3.55 3.69 3.92 3.95 4.11Exchange Rate (RON per EUR, eop) 4.39 4.42 4.41 4.41 4.41 4.42 4.48 4.44 4.44 4.41



April 2015


1 | Real GDP | 2000-2019 | var. in %







8 | Investment | evolution of forecasts

Notes and sources

General: Long-term chart period from 2000 to 2019 unless otherwise stated. All real sector data are from the National Institute of Statistics (INS, Institutul National de Statistica), the National Bank of Romania (NBR) and Eurostat. See below for details. Forecasts based on FocusEconomics Consensus Forecast. 1 GDP, annual variation in %. Source: INS.2 Quarterly GDP (not seasonally adjusted), year-on-year variation in %.

Source: INS.3 GDP, evolution of 2015 forecasts during the last 18 months.4 GDP, evolution of 2016 forecasts during the last 18 months.5 Private consumption, annual variation in %. Source: INS.6 Gross fixed investment, annual variation in %. Source: INS.7 Private consumption, change in 2015 and 2016 forecasts during the last

18 months.8 Gross fixed investment, change in 2015 and 2016 forecasts during the

last 18 months.9 Industrial production, annual variation in %. Source: INS.10 Unemployment, % of active population. Source: Eurostat.11 Balance of central government as % of GDP. Source: NBR.12 Industrial production, evolution of 2015 and 2016 forecasts during the

last 18 months.13 Unemployment, evolution of 2015 and 2016 forecasts during the last 18

months.14 Balance of central government as % of GDP, evolution of 2015 and

2016 forecasts during the last 18 months.

Individual Forecasts 2015 2016Alpha Bank 2.8 -BofA Merrill Lynch 3.4 3.3Capital Economics 3.0 3.3Citigroup Global Mkts 3.0 3.0Credit Agricole 2.8 3.0Danske Bank 3.3 3.0Deutsche Bank 3.0 3.2EIU 2.9 3.8Erste Bank 2.8 3.0Eurobank 2.7 -Frontier Strategy Group 2.5 2.8HSBC 2.9 3.0ING 3.1 2.9JPMorgan 2.7 2.7National Bank of Greece 3.1 3.0Nomura 3.0 3.0Oxford Economics 3.0 3.2OTP Bank 3.0 3.3Raiffeisen Research 3.0 3.0The Bleyzer Foundation 2.5 -UniCredit 2.7 2.5SummaryMinimum 2.5 2.5Maximum 3.4 3.8Median 3.0 3.0Consensus 2.9 3.1History30 days ago 2.9 3.160 days ago 2.8 3.190 days ago 2.8 3.0Additional ForecastsIMF (Oct. 2014) 2.5 2.8European Commission (Feb. 2015) 2.7 2.9Government (Dec. 2014) 2.5 -

-10

-5

0

5

10

2000 2005 2010 2015

RomaniaEastern EuropeWorld

-2

0

2

4

6

Q1 12 Q1 13 Q1 14 Q1 15 Q1 16

RomaniaEastern EuropeWorld

2

3

4

5



2

3

4

5



2.2

2.6

3.0

3.4

3.8


2015 2016

-20

-10

0

10

20

2000 2005 2010 2015

Romania

Eastern Europe-40

-20

0

20

40

60

2000 2005 2010 2015

RomaniaEastern Europe

2

4

6

8


2015 2016



April 2015


12 | Industry | evolution of forecasts

9 | Industry | variation in %



14 | Fiscal Balance | evolution of fcst


4.5

5.0

5.5

6.0


2015 2016

-20

-10

0

10

20

2000 2005 2010 2015

Romania

Eastern Europe

6.2

6.4

6.6

6.8

7.0


2015 2016

5

7

9

11

13

2000 2005 2010 2015

Romania

Eastern Europe

-2.4

-2.2

-2.0

-1.8

-1.6


2015 2016

-10

-5

0

5

2000 2005 2010 2015

Romania

Eastern Europe

Individual Forecasts 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016Alpha Bank - - - - - - - - -2.0 - - -BofA Merrill Lynch - - - - - - - - -2.3 -2.3 41.1 41.2Capital Economics 3.0 4.0 3.0 5.0 8.0 8.0 7.0 6.5 -1.8 -1.8 - -Citigroup Global Mkts 3.5 3.5 3.3 1.4 - - - - -1.9 -2.1 - -Credit Agricole - - - - - - - - - - - -Danske Bank 3.9 3.9 5.8 5.8 - - 7.0 7.0 - - - -Deutsche Bank 4.1 3.5 5.0 5.5 8.5 7.8 - - -2.5 -2.6 40.8 41.5EIU 3.7 3.2 2.0 3.8 5.0 4.5 6.1 5.5 - - 39.1 38.9Erste Bank - - - - - - 6.6 6.5 -2.2 -2.1 40.6 40.5Eurobank - - - - - - - - -2.1 - - -Frontier Strategy Group 2.5 3.0 - - 4.7 5.3 6.8 6.5 - - - -HSBC - - - - 3.8 4.9 - - -1.2 -1.5 36.7 36.1ING - - - - - - - - - - - -JPMorgan - - - - 4.3 6.5 6.3 5.7 -1.2 -1.1 38.7 38.3National Bank of Greece - - 2.8 4.5 - - - - -2.5 -2.0 39.1 39.5Nomura - - - - - - - - -2.4 -2.0 36.0 39.4Oxford Economics 4.0 4.2 5.6 6.8 3.6 4.2 - - -2.5 -2.0 - -OTP Bank - - 2.9 4.1 - - - - -2.5 -2.6 38.4 38.6Raiffeisen Research 3.0 3.0 - - 4.5 4.5 6.6 6.5 -2.3 -2.3 40.0 40.1The Bleyzer Foundation 3.0 - 4.5 - 5.5 - 6.9 - -2.2 - 38.5 -UniCredit 3.9 2.7 2.4 3.6 - - 6.5 6.3 -1.8 -1.7 38.9 38.6SummaryMinimum 2.5 2.7 2.0 1.4 3.6 4.2 6.1 5.5 -2.5 -2.6 36.0 36.1Maximum 4.1 4.2 5.8 6.8 8.5 8.0 7.0 7.0 -1.2 -1.1 41.1 41.5Median 3.6 3.5 3.2 4.5 4.7 5.1 6.6 6.5 -2.2 -2.0 39.0 39.4Consensus 3.5 3.4 3.7 4.5 5.3 5.7 6.6 6.3 -2.1 -2.0 39.0 39.3History30 days ago 3.2 3.5 4.3 4.8 5.2 5.5 6.8 6.5 -2.1 -2.0 38.8 39.060 days ago 3.0 3.3 3.7 4.5 5.4 5.4 6.8 6.6 -2.2 -2.1 38.9 39.290 days ago 3.1 3.3 4.2 4.5 5.6 5.5 6.8 6.6 -2.2 -2.1 39.0 39.2

Unemployment% of active pop.

Public Debt% of GDP

Fiscal Balance% of GDP

Consumptionvariation in %

Investmentvariation in %

Industryvariation in %



April 2015


15 | Inflation | 2000 - 2019 | in %


19 | Core and Producer Prices | % var.

21 | MSCI Price Index

16 | Inflation | Q1 12-Q4 16 | in % Inflation | annual variation of consumer price index in %


20 | Money | variation in %

22 | Stock Market | BET

Notes and sources

General: Long-term chart period from 2000 to 2019 unless otherwise stated. All monetary sector data are from the National Institute of Statistics (INS, Institutul National de Statistica) and the Central Bank (NBR, National Bank of Romania). See below for details. Forecasts based on FocusEconomics Consensus Forecast. European Commission forecasts refer to annual average harmonized inflation. Forecasts based on FocusEconomics Consensus Forecast. 15 Inflation, annual variation of consumer price index (CPI) in % (eop).

Source: INS.16 Quarterly inflation, annual variation of consumer price index (CPI) in %

(eop). Source: INS.17 Inflation, evolution of 2015 inflation forecasts during the last 18 months.18 Inflation, evolution of 2016 inflation forecasts during the last 18 months.19 Core and producer price indices, annual variation in % (eop). 2006-

2014. Source: INS.20 Money, annual variation of M2 in %. 2000-2014. Source: NBR.21 Daily MSCI Price index in EUR. Source: MSCI Barra. From Jan. 2010

until end of previous week22 Daily index levels, BET Index. Source: Bucharest Stock Exchange. Jan.

2010 until end of previous week.

Individual Forecasts 2015 2016Alpha Bank - -BofA Merrill Lynch 1.1 2.4Capital Economics 0.8 1.8Citigroup Global Mkts 2.5 2.5Credit Agricole 1.2 2.2Danske Bank - -Deutsche Bank 1.7 2.4EIU 2.1 2.1Erste Bank - -Eurobank - -Frontier Strategy Group 0.8 1.2HSBC 1.5 2.5ING 2.0 2.5JPMorgan 1.7 1.8National Bank of Greece 1.5 2.5Nomura - -Oxford Economics 1.5 2.2OTP Bank - -Raiffeisen Research 2.0 2.8The Bleyzer Foundation 2.5 -UniCredit 2.1 2.4SummaryMinimum 0.8 1.2Maximum 2.5 2.8Median 1.7 2.4Consensus 1.7 2.2History30 days ago 2.0 2.560 days ago 2.0 2.690 days ago 2.5 2.9Additional ForecastsIMF (Oct. 2014) 3.0 2.9European Commission (Feb. 2015) 1.2 2.5Central Bank (Feb. 2015) 2.1 2.4

-5

0

5

10

2006 2008 2010 2012 2014

Core PPI

200

300

400

500

600

JanJulJanJulJanJulJanJulJanJulJan

0

1

2

3

4

5



0

10

20

30

40

2000 2005 2010 2015


0

10

20

30

40

50

2000 2003 2006 2009 2012

4,000

5,000

6,000

7,000

8,000

JanJulJanJulJanJulJanJulJanJulJan

1

2

3

4



0

2

4

6

8

10

Q1 12 Q1 13 Q1 14 Q1 15 Q1 16




April 2015

Monetary Sector | Interest Rate and Exchange Rate

23 | Interest Rate | 2000 - 2019 | in %


27 | Exchange Rate | RON per EUR

29 | RON per EUR 2015 | evol. of fcst

24 | Interest Rate | Q1 12-Q4 16 | in % Policy Interest Rate and Exchange Rate


28 | Exchange Rate | RON per EUR

30 | RON per EUR 2016 | evol. of fcst

Notes and sources

General: Long-term chart period from 2000 to 2019 unless otherwise stated. All monetary and external sector data are from the Central Bank (NBR, National Bank of Romania). See below for details. Forecasts based on FocusEconomics Consensus Forecast. 23 Interest rate, Central Bank Reference Rate in % (eop).24 Quarterly interest rate, Central Bank Reference Rate in % (eop).25 Interest rate, evolution of 2015 forecasts during the last 18 months.26 Interest rate, evolution of 2016 forecasts during the last 18 months.27 Exchange rate, RON per EUR (eop).28 Quarterly exchange rate, RON per EUR (eop).29 Exchange rate, evolution of 2015 forecast during the last 18 months.30 Exchange rate, evolution of 2016 forecast during the last 18 months.31 Current account balance as % of GDP.32 Trade balance, imports and exports, in EUR bn.33 International reserves, months of imports.34 Current account balance as % of GDP, evolution of 2015 and 2016

forecast during the last 18 months.35 Exports, annual variation in %.36 External debt as % of GDP.

4.0

4.2

4.4

4.6

4.8



4.0

4.2

4.4

4.6

4.8



1

2

3

4

5

6



4.3

4.4

4.5

4.6

Q1 12 Q1 13 Q1 14 Q1 15 Q1 16

0

3

6

9

12

Q1 12 Q1 13 Q1 14 Q1 15 Q1 16

Romania

Eastern Europe

2

3

4

5

2000 2005 2010 2015

0

10

20

30

40

2000 2005 2010 2015

Romania

Eastern Europe

1

2

3

4

5

6



Individual Forecasts 2015 2016 2015 2016Alpha Bank - - - -BofA Merrill Lynch 2.00 2.50 4.40 4.40Capital Economics - - - -Citigroup Global Mkts 2.00 3.50 4.58 4.50Credit Agricole - - 4.35 4.30Danske Bank - - 4.35 -Deutsche Bank 1.75 2.25 4.30 4.20EIU - - 4.20 4.20Erste Bank - - - -Eurobank 2.00 - 4.40 -Frontier Strategy Group - - - -HSBC 2.00 3.00 4.40 4.40ING 2.00 2.00 4.35 4.25JPMorgan 1.75 1.75 4.50 4.50National Bank of Greece 2.25 3.00 4.40 4.40Nomura 2.00 2.50 4.30 4.25Oxford Economics - - 4.16 4.22OTP Bank 2.00 2.75 4.45 4.43Raiffeisen Research 2.00 2.75 4.40 4.40The Bleyzer Foundation - - 4.40 -UniCredit 2.00 2.00 4.40 4.40SummaryMinimum 1.75 1.75 4.16 4.20Maximum 2.25 3.50 4.58 4.50Median 2.00 2.50 4.40 4.40Consensus 1.98 2.55 4.37 4.35History30 days ago 2.15 2.77 4.41 4.3760 days ago 2.25 2.83 4.43 4.3990 days ago 2.60 3.19 4.39 4.32

Interest Rate Exchange Rate% RON per EUR



April 2015

External Sector | Current Account, Trade and International Reserves



35 | Exports | annual variation in %

32 | Trade Balance | EUR billion



Individual Forecasts 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016Alpha Bank - - - - - - - - - -BofA Merrill Lynch -0.7 -1.2 - - - - - - 26.9 30.9Capital Economics - - - - - - - - - -Citigroup Global Mkts -1.8 -2.2 - - - - - - 32.4 32.9Credit Agricole -1.4 -1.4 - - - - - - - -Danske Bank - - - - - - - - - -Deutsche Bank -0.6 -0.9 - - - - - - 35.2 34.2EIU -0.8 -1.6 - - - - - - - -Erste Bank -0.7 -0.9 - - - - - - - -Eurobank -0.5 - - - - - - - - -Frontier Strategy Group - - - - - - - - - -HSBC -1.5 -2.0 -6.7 -8.6 54.8 59.3 61.5 67.9 32.8 34.1ING - - - - - - - - - -JPMorgan 0.3 0.3 -3.9 -3.1 62.0 64.1 65.9 67.2 35.8 35.6National Bank of Greece -0.2 -0.8 -5.5 -6.8 51.1 57.3 56.6 64.1 33.8 38.4Nomura -1.7 -2.0 - - - - - - - -Oxford Economics -1.8 -2.1 -8.4 -6.8 53.4 60.7 61.8 67.5 40.5 42.0OTP Bank -1.0 -1.8 - - - - - - - -Raiffeisen Research -1.5 -2.0 -6.4 -7.6 49.9 54.9 56.3 62.5 32.5 33.5The Bleyzer Foundation - - -5.4 - 56.1 - 61.5 - 35.5 -UniCredit -0.1 0.0 - - - - - - 31.6 37.2SummaryMinimum -1.8 -2.2 -8.4 -8.6 49.9 54.9 56.3 62.5 26.9 30.9Maximum 0.3 0.3 -3.9 -3.1 62.0 64.1 65.9 67.9 40.5 42.0Median -0.8 -1.5 -6.0 -6.8 54.1 59.3 61.5 67.2 33.3 34.2Consensus -0.9 -1.3 -6.1 -6.6 54.5 59.2 60.6 65.8 33.7 35.4History30 days ago -1.3 -1.6 -5.7 -6.7 51.1 54.0 56.8 60.7 33.2 34.560 days ago -1.2 -1.6 -5.7 -7.1 50.2 53.4 55.9 60.5 32.8 33.990 days ago -1.7 -2.1 -5.6 -6.1 54.3 59.5 59.9 65.6 32.7 33.1


Int. ReservesEUR bnEUR bn EUR bn

Exports Imports

-4

-3

-2

-1

0


2015 2016

-15

-10

-5

0

5

2000 2005 2010 2015

Romania

Eastern Europe

-25

0

25

50

2000 2005 2010 2015

Romania

Eastern Europe

-25

0

25

50

75

100

2000 2005 2010 2015


10

30

50

70

90

2000 2005 2010 2015

Romania

Eastern Europe

3

6

9

12

2000 2005 2010 2015

Romania

Eastern Europe



April 2015

Fact Sheet

Romania in the Region


Romania 4.5%

Russia 45.7%

Turkey 18.1%

Poland 12.4%

Czech Republic

4.7%

Other14.6%

Romania 5.4%

Russia 38.8%

Turkey 20.9%

Ukraine 12.2%

Poland 10.4%

Other12.3%

Other EU-27

30.8%

Germany17.5%Italy

11.0%

Hungary9.1%

Asia ex-Japan6.0%

Other25.6%

Turkey5.5%

Other EU-27

27.7%

Germany19.0%

Italy12.3%

France7.1%

Other28.4%

Other7.0%


Mineral Fuels11.2%

Food7.8%

Other8.4%


Mineral Fuels5.3%

Food8.4%

Trade Structure



Economic Structure


Exports

Exports

Imports

Imports

-20

0

20

40

60

80

100

1202004-06 2007-09 2010-12

Net Exports

Investment


PrivateConsumption

0

20

40

60

80

1002004-06 2007-09 2010-12

Agriculture

Manufacturing

Other Industry

Services

General Data


Political Data



• Large external imbalances• Political instability

• Low unemployment levels

.

• Receiver of large amount of EU funds

• EU membership shields the economy against emerging markets crises

• Lack of structural reforms in key economic sectors

Energy (2012)Primary Energy Production (trillion Btu): 1,092Primary Energy Consumption (trillion Btu): 1,461Electricity Generation (billion kW-h): 56.0Electricity Consumption (billion kW-h): 46.2Oil Supply (thousand bpd): 102Oil Consumption (thousand bpd): 216CO2 Emmissions (million metric tons): 86.1

Agency Rating OutlookMoody’s: Baa3 StableS&P: BBB- StableFitch Ratings: BBB- Stable


Transportation (2013) Airports: 45Railways (km): 10,777Roadways (km): 84,185Waterways (km): 1,731Chief Ports: Constanta, Braila

Official name: RomaniaCapital: Bucharest (2.3m)Other cities: Constanta (0.7m)

Iaşi (0.8m)Area (km2): 238,391Population (million, 2014 est.): 19.9Population density (per km2, 2014): 83.6Population growth rate (%, 2014 est.): -0.3Life expectancy (years, 2014 est.): 74.7Illiteracy rate (%, 2011): 2.3Language: RomanianMeasures: Metric systemTime: GMT+2

Prime Minister: Victor-Viorel PontaLast elections: 9 December 2012Next elections: December 2016Central Bank President: Mugur Isărescu

FOCUSECONOMICS Russia


April 2015

Russia

REAL SECTOR | Reality check prompts the government to change budget plans for this yearThe government announced on 2 March that it would present new fiscal projection for this year and next in an effort to shore up the deteriorating economic situation and worsening economic prospects. The economy has been affected by a number of structural problems, but the economic deterioration has been exacerbated by the Western sanctions that have been imposed on Russia in response to the Ukrainian crisis and the sharp fall in oil prices that began in the second half of 2014. Amendments to the 2015 budget passed the first reading in Russian’s lower house of parliament on 27 March.

According to the Ministry of Finance, budget revenues are now expected to be RUB 12.5 trillion this year, which represents a 17.5% reduction compared to the Ministry’s original projection and a 14.1% decrease over the previous year. Meanwhile, expenditures are expected to stay at RUB 15.2 trillion, which will then push the fiscal deficit from the previously-expected RUB 431 billion to RUB 2.7 trillion—or from 0.6% of GDP to 3.8% of GDP. For 2016, the new figures suggest that revenues will recover to RUB 14.0 trillion and expenditures will fall to RUB 15.0 trillion. The Ministry of Finance continues to expect that the budget will be balanced in 2017.

Outlook deteriorates


2011-13 2014-16 2017-19Population (million): 143 144 144GDP (USD bn): 2,046 1,582 1,786GDP per capita (USD): 14,274 11,009 12,429GDP growth (%): 3.0 -1.1 2.0Fiscal Balance (% of GDP): 0.0 -1.9 -1.0Public Debt (% of GDP): 10.5 14.0 14.7Inflation (%): 6.7 10.4 5.9Current Account (% of GDP): 3.4 3.5 2.7External Debt (% of GDP): 31.0 36.8 35.8

Russia

Ricardo AcevesSenior Economist

The Russian economy eked out unexpected growth in the last quarter of 2014, demonstrating resilience in the face of geopolitical headwinds, international sanctions, a falling ruble and lower oil prices. However, the start of 2015 has brought signs of contraction as negative growth momentum has been picking up speed. In February, industrial production growth plummeted to a two-year low and exports decreased for the eighth time in the last nine months. In addition, the manufacturing and services PMIs continued to point to contraction in March and confidence among Russian consumers fell to the lowest level since 2009 in Q1. Owing to the economic deterioration and lower tax take from the hydrocarbons sector, the Finance Ministry presented new fiscal projections for this year, which foresee a fiscal deficit of 3.8% of GDP.

Following lackluster economic growth in 2014, the Russian economy is expected to take a nosedive this year, driven by lower oil prices, international sanctions and geopolitical tensions. FocusEconomics panelists see the economy contracting 4.3% this year, which is down 0.1 percentage points from last month’s forecast. In 2016, the panel expects the economy to recover somewhat and grow a tepid 0.3%.

Inflation reached its highest level since 2002 in March with a rate of 16.9%. It is expected to continue rising in the first half of the year, before easing in the second half. Bank Rossii cut interest rates by 100 basis points to 14.0% in March and signaled that more cuts will be made. Panelists expect inflation to close 2015 at 13.0%. In 2016, the panel sees inflation falling to 7.4%.

Budget balance | % of GDP

Note: General government balance as % of GDP.Source: Ministry of Finance and FocusEconomics Consensus Forecast.

-6.0

-3.0

0.0

3.0

6.0

9.0

2002 2004 2006 2008 2010 2012 2014 2016

%



April 2015

The government’s new calculations are based on revised projections for oil prices, which are foreseen averaging USD 55 per barrel in 2015, USD 65 per barrel in 2016 and USD 70 per barrel in 2017. In addition, the government expects the economy to contract 3.0% this year and sees the ruble trading at an average RUB 60 per USD. In the previous budget, which many analysts had already considered too optimistic, the government had assumed that the oil price would average USD 100 per barrel in 2015, while it projected economic growth of 1.2%.

The Ministry of Finance also indicated that the new budget deficit (now projected at RUB 2.7 trillion, equivalent to 3.8% of GDP) would be covered by the country’s Reserve Fund, rather than by raising debt. The government expects that the RUB 4.7 trillion Reserve Fund will cover about RUB 3.0 trillion in total spending. That will, however, require the parliament to increase the ceiling on annual spending from the Sovereign Wealth Fund, but it is unlikely that the Duma will alter the plan. As a result, the total value of the Reserve Fund is expected to fall by over 60% this year.

In the geopolitical arena, although the new Minsk peace agreement—better known as Minsk-II—that was signed on 12 February appears to be holding for longer than the last agreement, most analysts and observers have concluded that it is fragile and will not hold for very long. In order to de-escalate tensions, observers agree that further rounds of negotiations are required and that additional steps have be implemented. Should the violence in the Eastern regions of Ukraine continue and diplomatic talks fail, Western countries are likely to prolong, and perhaps even increase, economic sanctions on Russia. Should this occur, the Russian government would have to make further spending cuts and increase borrowing in order to run a similar deficit beyond 2015 as the Reserve Fund is expected to be depleted this year. This would be very costly, given the country’s worsening sovereign credit rating.

The government’s new fiscal deficit projections are more in line with those of FocusEconomics panelists who expect the fiscal balance to incur a deficit of 3.1% of GDP in 2015. For 2016, participants in the Consensus see the fiscal deficit falling to 2.1% of GDP.

REAL SECTOR | Economy cools in Q4 but unexpectedly ekes out growthEconomic growth decelerated less than expected in the last quarter of 2014, according to preliminary data published by the Federal Statistics Service (Rosstat) on 1 April. The Russian economy increased 0.4% year-on-year in Q4, which came in below the revised 0.9% expansion registered in Q3 (previously reported: +0.7% year-on-year). That said, markets expected that Russia’s GDP had contracted 0.4% in the last quarter of 2014. Meanwhile, sequential data showed that GDP was flat in seasonally-adjusted terms in Q4 2014, which followed a similar reading recorded in Q3.

The moderation in Q4 was mainly the result of a further contraction in government spending, another decrease in fixed investment and deterioration in the external sector. Exports of goods and services contracted 2.3% annually in Q4, which came in below the 1.3% decrease observed in Q3. Imports plummeted 7.8% over the same quarter of the previous year, which followed the 7.6% contraction registered in the third quarter. Consequently, the external sector’s net contribution to overall economic growth fell from 1.7 percentage points to 1.2 percentage points.

-6.0

-3.0

0.0

3.0

6.0

Q1 2011 Q1 2012 Q1 2013 Q1 2014 Q1 2015

%


Note: Year-on-year changes of GDP in %.Source: Federal State Statistics Service (Rosstat) and FocusEconomics Consensus Forecast.



April 2015

On the domestic front, government spending deteriorated and contracted 0.2% in Q4, which was below the 0.1% decrease tallied in Q3. Fixed investment eased the pace of contraction from a 1.7% decrease in Q3 to a 1.2% contraction in Q4. Conversely, private consumption showed solid growth in the last quarter of 2014, despite the deteriorating economic environment. It increased 1.0% in Q4, which marked an acceleration over the 0.2% rise recorded in the previous quarter.

In 2014, the Russian economy expanded 0.6%, which confirmed a preliminary estimate released in January. The reading came in below the 1.3% expansion recorded in 2013 and represented the worst economic performance since 2009.

The economy is expected to experience a significant contraction this year due to a combination of lower oil prices, high inflation, tightening of monetary policy and no signs that the West will lift the sanctions. The Central Bank expects the economy to contract between 3.4% and 4.0% in 2015. FocusEconomics Consensus Forecast panelists project Russia’s GDP to fall 4.3% in 2015, which is down 0.1 percentage points from last month’s forecast. Panelists are becoming more pessimistic regarding Russia’s economic outlook and expect the economy to expand only 0.3% in 2016.

REAL SECTOR | Contraction in services eases while manufacturing worsensThe HSBC manufacturing Purchasing Managers’ Index (PMI) slipped from 49.7 in February to 48.1 in March. The indicator continues to hover below the 50-threshold that separates expansion from contraction in business activity in the sector. According to HSBC, “The Russian manufacturing sector registered a modest deterioration in operating conditions during March as production and new business both recorded mild declines.”

HSBC also noted that March’s print reflected a deterioration in employment and that backlogs of work continued to fall. That said, respondents to the March survey pointed out that although input and output prices continued to rise, the increase was slower than in the first two months of the year.

Moreover, the services PMI improved in March, rising to 46.1 from 41.3 in February. Despite the improvement, the indicator remains below the 50-threshold, which indicates contraction in the sector. According to HSBC, respondents to the survey signaled that economic conditions are still challenging, which was highlighted by a sharp fall in new business. However, in certain sectors, which are affected by seasonal factors (namely hotels and restaurants), saw modest growth in March. In addition, Russian services providers signaled an increase in optimism that the recent downturn will be transitory, with expectations that business activity will improve in the coming months. HSBC noted that, “companies offered a more upbeat assessment of the future than at any time in the past seven months amid hope of a turnaround in wider economic performance over the coming year.

REAL SECTOR | Industrial production falls to two-year lowAccording to the Russian statistical office, industrial production contracted 1.6% year-on-year in February. The reading, which contrasted the 0.9% expansion tallied in January, exceeded the 0.6% fall the markets had expected and was mainly the result of a plunge in manufacturing output and a deterioration in growth in public utilities. February’s contraction represented the sharpest contraction in output since February 2013.


Note: Annual variation of GDP in %.Source: Federal Statistical Office and FocusEconomics Consensus Forecast.

-10.0

-5.0

0.0

5.0

10.0

2002 2004 2006 2008 2010 2012 2014 2016

%

Purchasing Managers’ Index (PMI)

Note: Markit HSBC Purchasing Managers’ Index (PMI). A reading above 50 indicates an expansion in business activity while a value below 50 points to a contraction.Source: Markit and HSBC.

40

45

50

55

Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15

Manufacturing PMI Services PMI

Industrial Production | annual variation in %

Note: Year-on-year and annual average variation of industrial production index in %.Source: Federal State Statistics Service (Rosstat) and FocusEconomics calculations.

-4.0

-2.0

0.0

2.0

4.0


Year-on-year

Annual average

%



April 2015

A month-on-month comparison confirms the deterioration suggested by the annual data. Industrial production contracted a seasonally-adjusted 0.7% in February, which followed the 1.8% decrease observed in January.

As a result of the contraction seen in the annual data, annual average growth in industrial production fell 1.7% in January to 1.4% in February.

Economists polled by FocusEconomics expect industrial production to decrease 2.1% in 2015, which is down 0.6 percentage points from last month’s forecast. For 2016, the panel expects industrial production to increase 1.1%.

OUTLOOK | Russian consumers become more pessimisticThe consumer confidence indicator elaborated by the Federal Statistics Service (Rosstat) plummeted from minus 18% in the fourth quarter of 2014 to minus 32% in the first quarter. Q1’s result marked the lowest confidence level since Q2 2009.

According to Rosstat, all the components of the index registered substantial deteriorations in Q1 compared to Q4, notably households’ assessment of their current financial situation and the current overall economic situation. Expectations also weakened over the previous quarter, although the weakening was less pronounced this time. The survey also showed that consumers’ muted inflation expectations, low propensity to buy and increasing fears or rising unemployment.

FocusEconomics Consensus Forecast panelists expect private consumption to contract 6.1% in 2015, which is down 0.4 percentage points from last month’s projection. For 2016, panelists expect private consumption to expand a mild 0.6%.

MONETARY SECTOR | Inflation jumps to highest level since 2002In March, consumer prices rose 1.2% over the previous month, which came in below the 2.2% increase observed in February. The result, which overshot the 1.0% increase the markets had expected, marked a second consecutive moderation in the monthly increase of consumer prices. March’s print reflected a slowdown in the increase of both food prices and non-food prices, mainly due to the gradual cooling of the economy, which is acting as a brake on inflation.

Despite the moderation on a monthly basis, annual headline inflation crept up from 16.7% in February to 16.9% in March, which slightly overshot the 16.8% increase the markets had anticipated and represented the highest level since February 2002. At the current rate, inflation remains well above the Russian Central Bank’s 4.5% inflation target.

Inflation is expected to reach its peak in the second quarter this year due to effects of the ruble’s sharp depreciation and Russian embargo on food imports from some Western countries.

Russia’s Finance Ministry expects that the inflation rate will reach a peak of more than 17% in the first half of this year before easing in the second half. The Ministry expects inflation to end 2015 below 12.0%. FocusEconomics Consensus Forecast panelists see inflation ending 2015 at 13.0%, which is up 0.7 percentage points from last month’s forecast. For 2016, participants expect inflation to ease to 7.4%.

Consumer Confidence Index

Note: Consumer Confidence Index. Values above 0 indicate an optimisticoutlook while values below 0 indicate a pessimistic outlook.Source: Federal State Statistics Service (Rosstat).

-40

-30

-20

-10

0

Q3 2011 Q1 2012 Q3 2012 Q1 2013 Q3 2013 Q1 2014 Q3 2014 Q1 2015

%


Note: Year-on-year and month-on-month variation of consumer price index in %.Source: Federal State Statistics Service (Rosstat).

5.0

9.0

13.0

17.0

21.0

0.0

1.0

2.0

3.0

4.0




%%



April 2015

MONETARY SECTOR | Central Bank cuts interest rates for second time this year, warns of impending contraction in economic activityThe recent stabilization in both the ruble and global oil prices prompted Russia’s Central Bank to cut the one-week repurchase rate by 100 basis points to 14.00% at its 13 March monetary policy meeting. March’s cut, which was in line with market expectations, is the second this year and came after the monetary authority’s emergency rate hike in December 2014, through which it attempted to stabilize the freefall of the ruble and mitigate a potential currency crisis. The Bank insisted that its decision is intended to provide a balance between lowering inflation and supporting economic growth and signaled that more rate cuts will continue.

In its statement, the Central Bank said that the economy had managed to grow somewhat at the end of 2014. However, the Bank pointed out that, “structural factors continue to exert a restraining influence in economic growth,” although it did recognize that the economic slowdown is becoming more cyclical. Monetary authorities warned that economic activity will contract in the coming months, which, will contribute to lower inflation. Economic activity is expected to deteriorate going forward mainly due to low oil prices—on average, oil prices are lower compared to last year—more difficult financial conditions for Russian borrowers, and the fact that Russian firms are increasingly finding foreign capital markets to be inaccessible. Consequently, investment is expected to deteriorate and drag on growth. However, an increase in exports will partially mitigate this drag as exports will become more competitive due to the depreciation of the ruble. The Bank went on to state that it expects GDP to contract between 3.5% and 4.0% in 2015.

Regarding consumer prices, the Central Bank stated that inflation remains high due to the ruble’s depreciation and imports restrictions. However, monetary authorities said that the impact of these supply-side factors will fade away in the coming months and will have been exhausted at the end of the year. Simultaneously, the Bank indicated that weaker growth in domestic demand and the fall in real wages will lead to downward pressures on inflation. The Bank foresees that inflation will reach its peak in Q2 2015 and that it will fall to 9.0% at the end of the year. It is expected to decline further to reach the Bank’s 4.0% inflation target in 2017. The next monetary policy meeting is scheduled for 30 April.

Commenting on the Central Bank’s decision, Vladimir Miklashevsky, Economist at Danske Bank, pointed out:

We welcome the decision to cut, as last year’s aggressive monetary policy has caused a massive monetary contraction and is likely to send the Russian economy deep into recession this year (we expect GDP to fall -7.9%), with a further -0.8% y/y fall in 2016. As we expect CPI to slow to 11% y/y by the end of 2015, we do not exclude the key rate falling under 10% in H2 15 as the central bank follows through on its new stance.

FocusEconomics Consensus Forecast panelists expect the Central Bank to continue easing the monetary policy throughout this year. They expect the refinancing rate to close 2015 at 11.39%. For 2016, the panel expects the rate to end the year at 7.89%.

Monetary Policy Rate | in %

Note: 1-Week Repo Rate in %.Source: Central Bank of the Russian Federation (CBR).

0

5

10

15

20


%



April 2015

EXTERNAL SECTOR | Decline in exports and imports moderates in February; Ural oil price falls again in MarchIn February, exports totaled USD 29.2 billion, which represented a 19.9% contraction over the same month last year. Although the reading marked the eighth contraction in the last nine months, the decrease was slower than the 30.5% plunge registered in January. Imports followed suit and decreased 35.4% annually in February, which, nonetheless marked a moderation in the pace of contraction compared to the 40.7% decreased registered in January.

The trade surplus, however, continued to improve. In February, the trade balance incurred a surplus of USD 13.6 billion, which was came in above the USD 12.3 billion observed in February 2014. In the 12-months up to February, the trade surplus widened slightly to USD 188 billion from the USD 186 billion recorded in the 12 months up to January.

Following a short-lived recovery in February, the price for Ural oil, which is Russia’s key export commodity, declined again. At the end of March, the Ural oil barrel traded at USD 52.4, which was 13.3% lower than at the end of February and lost half of its value in annual terms. Despite expectations that oil prices will remain low this year, Russian authorities had confirmed that the country will not reduce oil output. Meanwhile, the Russian Central Bank published its assessment of the country’s economic outlook, where it sees two scenarios. Under a baseline scenario, the Banks expects the price for Ural oil to average USD 80. Under a worst-case scenario, the Bank sees oil prices averaging USD 60.

FocusEconomics Consensus Forecast panelists expect merchandise exports to plummet 23.0% in 2015 and to increase 8.6% in 2016. As a result of the imports ban imposed by the government in early August, imports are expected to contract 22.7% in 2015. In 2016, imports will rebound and increase 8.0%.

Merchandise Trade

Note: 12-month sum of trade balance in USD billion and annual variation of the 12-month sum of exports and imports in %.Source: Federal State Statistics Service (Rosstat) and Ministry of Economic Development.

-16

-8

0

8

160

180

200

220


%

Trade Balance (USD bn, left scale)Exports (yoy, right scale)Imports (yoy, right scale)



April 2015


Annual Data 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019Real Sector Population (million) 143 143 143 144 144 144 144 144 144 144GDP per capita (USD) 10,673 13,192 14,289 15,340 14,099 8,892 10,035 11,224 12,298 13,765GDP (USD bn) 1,525 1,886 2,048 2,204 2,026 1,278 1,442 1,613 1,767 1,978GDP per capita (EUR) 8,046 9,574 10,873 10,883 9,736 8,313 9,501 10,214 10,697 11,590GDP (EUR bn) 1,150 1,369 1,558 1,564 1,399 1,195 1,365 1,468 1,537 1,665GDP (RUB bn) 46,309 55,967 62,176 66,190 71,406 79,323 86,145 93,406 100,756 108,270Economic Growth (Nominal GDP, ann. var. in %) 19.3 20.9 11.1 6.5 7.9 11.1 8.6 8.4 7.9 7.5Economic Growth (GDP, annual var. in %) 4.5 4.3 3.4 1.3 0.6 -4.3 0.3 1.6 2.1 2.2Private Consumption (annual var. in %) 5.5 6.8 7.8 5.0 1.3 -6.1 0.6 2.3 2.9 3.1Government Consumption (annual var. in %) -1.5 1.4 2.6 1.1 -0.1 - - - - -Fixed Investment (annual var. in %) 5.9 10.2 5.6 0.9 -2.0 -10.1 1.1 3.3 3.6 3.7Industrial Production (annual var. in %) 7.3 5.1 3.4 0.4 1.6 -2.1 1.1 2.2 2.3 2.4Retail Sales (annual var. in %) 6.2 6.9 6.5 3.9 2.5 -5.1 2.1 2.9 3.2 3.2Unemployment (% of active population, aop) 7.5 6.6 5.5 5.5 5.2 6.5 6.4 6.0 5.7 5.5Fiscal Balance (% of GDP) -3.9 0.8 0.0 -0.7 -0.6 -3.1 -2.1 -1.0 -1.0 -0.9Public Debt (% of GDP) 9.0 9.5 10.5 11.4 14.4 13.6 14.0 14.5 14.6 14.9Monetary and Financial Sector Money (annual variation of M2 in %) 31.1 22.3 11.9 14.6 2.3 - - - - -Inflation (CPI, annual variation in %, eop) 8.8 6.1 6.5 6.5 11.4 13.0 7.4 6.1 5.4 5.1Inflation (CPI, annual variation in %, aop) 6.9 8.4 5.1 6.8 7.8 15.4 8.3 6.8 5.8 5.3Inflation (PPI, annual variation in %, eop) 16.7 12.0 5.1 3.7 5.9 - - - - -1-Week Repo Rate (%, eop) 5.00 5.25 5.50 5.50 17.00 11.39 7.89 7.29 6.65 5.8010-Year OFZ Bond Yield (%, eop) 7.44 8.50 6.85 7.71 14.09 - - - - -Stock Market (RTS variation in %) 22.5 -21.9 10.5 -5.5 -45.2 - - - - -Exchange Rate (RUB per USD, eop) 30.5 32.0 30.5 32.7 56.3 61.8 58.1 57.7 56.3 53.2Exchange Rate (RUB per USD, aop) 30.4 29.7 30.4 30.0 35.2 62.1 59.7 57.9 57.0 54.7Exchange Rate (RUB per EUR, eop) 41.0 41.7 40.3 45.3 72.6 64.2 62.1 65.1 66.0 64.1Exchange Rate (RUB per EUR, aop) 40.3 40.9 39.9 42.3 51.0 66.4 63.1 63.6 65.5 65.0External Sector Current Account Balance (% of GDP) 4.6 5.2 3.5 1.5 2.9 3.9 3.6 2.9 2.7 2.6Current Account Balance (USD bn) 70.3 98.8 71.3 34.1 59.5 50.1 51.3 46.8 47.8 51.4Merchandise Trade Balance (USD bn) 147 197 192 182 190 145 159 174 190 209Merchandise Exports (USD bn) 393 515 527 523 498 383 416 453 494 539Merchandise Imports (USD bn) 246 319 336 341 308 238 257 279 303 329Merchandise Exports (annual variation in %) 32.1 31.3 2.3 -0.8 -4.9 -23.0 8.6 8.7 9.0 9.2Merchandise Imports (annual variation in %) 33.6 29.7 5.4 1.7 -9.8 -22.7 8.0 8.5 8.6 8.7International Reserves (USD bn) 479 499 538 510 385 327 311 340 355 362International Reserves (months of imports) 23.4 18.8 19.2 17.9 15.0 16.5 14.5 14.6 14.0 13.2External Debt (USD bn) 489 545 636 729 597 557 538 598 653 661External Debt (% of GDP) 32.1 28.9 31.1 33.1 29.5 43.6 37.3 37.1 37.0 33.4

Quarterly Data Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16Economic Growth (GDP, annual var. in %) 0.9 0.4 -3.4 -4.6 -4.9 -3.9 -1.0 0.2 1.0 1.3Economic Growth (GDP, qoq variation in %) 0.0 0.0 - - - - - - - -Consumer Conf. Index (0-point threshold) -7.0 -18.0 -32.0 - - - - - - -Inflation (CPI, annual variation in %, eop) 8.0 11.4 16.9 15.9 15.0 13.0 7.9 7.5 7.5 7.41-Week Repo Rate (%, eop) 8.00 17.00 14.00 13.42 12.50 11.39 9.75 8.85 8.30 7.89Exchange Rate (RUB per USD, eop) 39.4 56.3 58.5 63.6 62.1 61.8 60.3 60.0 58.8 58.1Exchange Rate (RUB per EUR, eop) 50.0 72.6 62.4 67.0 64.4 64.2 63.2 63.4 62.6 62.1

Monthly Data Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15Industrial Production (ann. var. in %) 0.4 1.5 0.0 2.8 2.9 -0.4 3.9 0.9 -1.6 -HSBC Manufacturing PMI (50-threshold) 49.1 51.0 51.0 50.4 50.3 51.7 48.9 47.6 49.7 48.1HSBC Services PMI (50-threshold) 49.8 49.7 50.3 50.5 47.4 44.5 45.8 43.9 41.3 46.1Unemployment (% of active population) 4.9 4.9 4.8 4.9 5.1 5.2 5.3 5.5 5.8 -Inflation (CPI, mom variation in %) 0.6 0.5 0.2 0.7 0.8 1.3 2.6 3.9 2.2 1.2Inflation (CPI, annual variation in %) 7.8 7.5 7.6 8.0 8.3 9.1 11.4 15.0 16.7 16.9Exchange Rate (RUB per USD, eop) 33.6 35.7 36.3 39.4 43.4 47.7 56.3 68.7 60.7 58.5Exchange Rate (RUB per EUR, eop) 46.6 47.7 48.9 50.0 53.8 61.7 72.6 79.4 69.3 62.4Merchandise Exports (annual variation in %) -2.7 5.7 -2.5 -15.0 -4.4 -21.5 -22.5 -30.5 -19.9 -Ural oil price (USD per barrel, eop) 109.3 105.0 100.4 92.7 83.3 71.4 53.4 47.6 60.5 52.4



April 2015

0%

10%

20%

30%

40%

< -8.0 -7.0 -6.0 -5.0 -4.0 -3.0 -2.0 -1.0 > -1.0


1 | Real GDP | 2000-2019 | var. in %




Notes and sources

Long-term chart period from 2000 to 2019 unless otherwise stated. All real sector data are from the Federal State Statistics Service (Rosstat). Forecasts are based on FocusEconomics Consensus Forecast.1 GDP, real annual variation in %. 2 Quarterly GDP (seasonally adjusted), year-on-year variation in %.3 GDP, evolution of 2015 forecasts during the last 18 months.4 GDP, evolution of 2016 forecasts during the last 18 months.5 GDP, panelist distribution of 2015 forecasts. Concentration of panelists in forecast interval in


Individual Forecasts 2015 2016Alfa-Bank -5.0 2.0Allianz -4.0 -1.0BCS -3.4 1.0Berenberg -4.0 -1.5BofA Merrill Lynch -4.0 0.9Capital Economics -5.0 2.0Citigroup Global Mkts -3.0 1.5Credit Agricole -5.0 1.5Credit Suisse -3.6 0.4Danske Bank -7.9 -0.8DekaBank -3.0 1.0Deutsche Bank -5.2 -3.4EIU -4.0 0.3Frontier Strategy Group -5.0 0.5Goldman Sachs -2.7 1.4HSBC -3.5 -1.5ING -3.9 0.0JPMorgan -4.0 2.0KBC -5.0 -2.5KUKE S.A. -2.0 1.0Macro-Advisory Ltd. -4.0 0.0Nomura -4.4 0.8Nordea -3.9 0.2OTP Bank -4.2 -0.6Oxford Economics -6.3 0.4Raiffeisen Research -4.0 0.5Renaissance Capital -4.3 2.2Rosbank -3.5 0.5Scotiabank -5.0 0.5SEB -5.0 -1.0UBS -4.5 0.0UniCredit -4.5 -1.4VTB Capital -4.5 2.5WIIW -3.9 1.9SummaryMinimum -7.9 -3.4Maximum -2.0 2.5Median -4.0 0.5Consensus -4.3 0.3History30 days ago -4.2 0.560 days ago -4.1 0.690 days ago -2.1 0.7Additional ForecastsGovernment (Mar. 2015) -3.0 -IMF (Jan. 2015) -3.0 -1.0European Commission (Feb. 2015) -3.5 0.2

-10

-5

0

5

10

2000 2005 2010 2015

RussiaEastern EuropeWorld -6

-3

0

3

6

Q1 12 Q1 13 Q1 14 Q1 15 Q1 16

RussiaEastern EuropeWorld

-6

-3

0

3

6



-10

-5

0

5






April 2015



-15

-10

-5

0

5

10


2015 2016


-20

-10

0

10

20

30

2000 2005 2010 2015

RussiaEastern Europe


-10

-5

0

5


2015 2016


-10

-5

0

5

10

15

2000 2005 2010 2015


Individual Forecasts 2015 2016 2015 2016Alfa-Bank -10.0 2.0 -2.0 2.0Allianz - - - -BCS - - -4.5 3.5Berenberg - - - -BofA Merrill Lynch -8.1 1.7 -7.9 3.8Capital Economics -6.0 2.0 -13.0 1.0Citigroup Global Mkts -7.0 1.0 -5.6 2.5Credit Agricole - - - -Credit Suisse -3.4 1.7 - -Danske Bank -5.5 -0.2 -12.0 -1.2DekaBank - - - -Deutsche Bank -6.8 -3.2 -11.5 -5.6EIU -6.6 1.0 -17.0 0.0Frontier Strategy Group -6.0 0.8 - -Goldman Sachs - - - -HSBC -6.0 -1.2 -12.5 -5.0ING - - - -JPMorgan -7.5 3.0 -9.5 6.5KBC - - - -KUKE S.A. -3.0 1.5 -6.0 2.0Macro-Advisory Ltd. - - -8.0 -2.0Nomura -6.2 0.9 - -Nordea -4.0 0.5 -9.0 0.5OTP Bank -5.0 -0.4 -8.0 -0.4Oxford Economics -8.7 -0.4 -18.0 0.1Raiffeisen Research -6.0 1.0 -8.0 0.0Renaissance Capital -3.9 2.5 -16.0 3.5Rosbank -5.7 -2.2 -6.5 -0.1Scotiabank - - - -SEB - - - -UBS -5.7 1.4 -10.0 -2.0UniCredit -5.2 -3.0 -13.0 5.0VTB Capital -8.5 2.0 -15.1 4.5WIIW -6.0 2.0 -10.0 5.0SummaryMinimum -10.0 -3.2 -18.0 -5.6Maximum -3.0 3.0 -2.0 6.5Median -6.0 1.0 -9.8 0.8Consensus -6.1 0.6 -10.1 1.1History30 days ago -5.7 0.8 -9.4 1.160 days ago -5.0 0.7 -8.3 1.290 days ago -2.8 1.0 -4.8 1.2


Notes and sources

Long-term chart period from 2000 to 2019 unless otherwise stated. All real sector data are from the Federal State Statistics Service (Rosstat). Forecasts are based on FocusEconomics Consensus Forecast.6 Private consumption, annual variation in %. 7 Private consumption, evolution of 2015 and 2016 forecasts during the last 18 months.8 Gross fixed investment, annual variation in %.9 Gross fixed investment, evolution of 2015 and 2016 forecasts during the last 18 months.




April 2015


Individual Forecasts 2015 2016 2015 2016Alfa-Bank -2.0 1.0 - -Allianz - - - -BCS -4.1 2.5 - -Berenberg - - 7.0 8.0BofA Merrill Lynch - - 6.0 5.8Capital Economics - - 7.0 6.7Citigroup Global Mkts - - 7.0 6.5Credit Agricole - - - -Credit Suisse - - 7.0 6.8Danske Bank - - 8.1 7.4DekaBank - - - -Deutsche Bank -6.7 -2.1 6.0 5.8EIU -2.0 1.2 - -Frontier Strategy Group -4.0 0.9 6.8 6.9Goldman Sachs - - - -HSBC -0.4 -0.3 5.8 5.5ING - - - -JPMorgan - - 6.2 6.0KBC - - - -KUKE S.A. -2.0 1.8 6.5 6.2Macro-Advisory Ltd. 1.5 2.0 6.0 5.5Nomura - - - -Nordea - - 6.9 6.3OTP Bank - - - -Oxford Economics -5.6 -0.3 6.4 6.8Raiffeisen Research -4.0 1.0 7.0 7.0Renaissance Capital -3.8 2.0 5.7 5.3Rosbank 1.5 - 6.0 6.1Scotiabank - - - -SEB - - 6.1 6.3UBS 1.0 1.5 - -UniCredit - - 6.9 7.0VTB Capital - - - -WIIW 1.0 3.0 5.5 5.3SummaryMinimum -6.7 -2.1 5.5 5.3Maximum 1.5 3.0 8.1 8.0Median -2.0 1.2 6.4 6.3Consensus -2.1 1.1 6.5 6.4History30 days ago -1.5 1.3 6.4 6.360 days ago -1.5 1.4 6.3 6.290 days ago -0.3 1.5 5.9 5.8


Notes and sources

Long-term chart period from 2000 to 2019 unless otherwise stated. All real sector data are from the Federal State Statistics Service (Rosstat). Forecasts are based on FocusEconomics Consensus Forecast.10 Industrial production, annual variation in %.11 Industrial production, evolution of 2015 and 2016 forecasts during the last 18 months.12 Unemployment, % of active population.13 Unemployment, evolution of 2015 and 2016 forecasts during the last 18 months.


-12

-6

0

6

12

2000 2005 2010 2015



-4

-2

0

2

4


2015 2016


4

6

8

10

12

2000 2005 2010 2015



5.0

5.5

6.0

6.5

7.0


2015 2016



April 2015


12

13

14

15


2015 2016


0

20

40

60

2000 2005 2010 2015



-10

-5

0

5

10

2000 2005 2010 2015

Russia

Eastern Europe


-4.0

-3.0

-2.0

-1.0

0.0


2015 2016



Individual Forecasts 2015 2016 2015 2016Alfa-Bank - - - -Allianz -2.5 -3.0 - -BCS -3.1 -1.5 - -Berenberg -3.0 -3.1 - -BofA Merrill Lynch -4.0 -3.7 14.3 -Capital Economics -4.0 -2.5 14.5 16.0Citigroup Global Mkts -3.0 -1.5 12.7 13.5Credit Agricole - - - -Credit Suisse -4.3 -2.2 15.0 14.3Danske Bank - - - -DekaBank -2.1 -1.0 - -Deutsche Bank -2.1 -1.7 14.5 15.6EIU -3.8 -2.3 - -Frontier Strategy Group - - - -Goldman Sachs - - - -HSBC - - - -ING - - - -JPMorgan -2.7 -2.3 12.2 12.2KBC - - - -KUKE S.A. - - 14.0 14.3Macro-Advisory Ltd. -2.5 -1.5 11.0 12.0Nomura - - - -Nordea -3.0 -2.0 - -OTP Bank -4.0 -1.0 - -Oxford Economics - - 11.8 11.7Raiffeisen Research -3.2 -2.0 12.5 13.5Renaissance Capital -2.0 -0.5 11.2 11.5Rosbank -3.5 - 13.4 -Scotiabank - - - -SEB -3.5 -2.5 16.9 17.5UBS - - 13.5 13.7UniCredit - - 14.6 15.6VTB Capital -3.3 -1.8 - -WIIW -3.0 -3.0 15.0 15.0SummaryMinimum -4.3 -3.7 11.0 11.5Maximum -2.0 -0.5 16.9 17.5Median -3.1 -2.0 13.8 14.0Consensus -3.1 -2.1 13.6 14.0History30 days ago -2.4 -1.6 13.9 14.460 days ago -2.2 -1.6 13.9 13.790 days ago -1.2 -1.1 13.1 14.0


Notes and sources

Long-term chart period from 2000 to 2019 unless otherwise stated. All real sector data are from the Ministry of Finance. Forecasts are based on FocusEconomics Consensus Forecast.14 General government balance as % of GDP. 15 General government balance as % of GDP, evolution of 2015 and 2016 forecasts during the last 18 months. 16 Public debt as % of GDP. 17 Public debt as % of GDP, evolution of 2015 and 2016 forecasts during the last 18 months.



April 2015

0%

10%

20%

30%

40%

< 6.0 8.0 10.0 12.0 14.0 16.0 18.0 20.0 > 20.0


18 | Inflation | 2000 - 2019 | in %


19 | Inflation | Q1 12-Q4 16 | in %


Notes and sources

Long-term chart period from 2000 to 2019 unless otherwise stated. All monetary sector data are from the Federal State Statistics Service (Rosstat). Forecasts are based on FocusEconomics Consensus Forecast.18 Inflation, annual variation of consumer price index (CPI) in % (eop).19 Quarterly inflation, annual variation of consumer price index (CPI) in % (eop).20 Inflation, evolution of 2015 forecasts during the last 18 months.21 Inflation, evolution of 2016 forecasts during the last 18 months.22 Inflation, panelist distribution of 2015 forecasts. Concentration of panelists in forecast interval


Individual Forecasts 2015 2016Alfa-Bank 10.0 10.0Allianz 16.8 8.0BCS 14.6 7.0Berenberg 14.1 8.6BofA Merrill Lynch 11.5 5.1Capital Economics 15.0 8.0Citigroup Global Mkts 10.8 6.8Credit Agricole 16.5 7.0Credit Suisse 14.1 8.0Danske Bank 11.0 7.9DekaBank 14.3 5.2Deutsche Bank 12.5 7.9EIU 10.5 5.4Frontier Strategy Group 13.5 8.0Goldman Sachs - -HSBC 15.0 -ING 13.0 -JPMorgan 12.0 6.3KBC 12.0 8.0KUKE S.A. 10.8 8.0Macro-Advisory Ltd. 10.0 7.5Nomura 13.1 7.6Nordea 13.0 9.0OTP Bank - -Oxford Economics 10.8 6.2Raiffeisen Research 13.5 8.0Renaissance Capital 11.5 7.1Rosbank 13.2 6.9Scotiabank 12.5 7.9SEB 16.0 9.0UBS - -UniCredit 12.1 7.2VTB Capital 15.0 6.5WIIW - -SummaryMinimum 10.0 5.1Maximum 16.8 10.0Median 13.0 7.8Consensus 13.0 7.4History30 days ago 12.3 7.360 days ago 11.5 7.290 days ago 9.3 7.0Additional ForecastsCentral Bank Target 4.5 4.0IMF (Oct. 2014) 6.5 5.5



0

4

8

12

16

20



0

5

10

15

20

25

2000 2005 2010 2015


0

4

8

12

16



3

6

9

12

15

18

Q1 12 Q1 13 Q1 14 Q1 15 Q1 16




April 2015

0%

10%

20%

30%

40%

< 5.00 7.00 9.00 11.00 13.00 15.00 17.00 19.00 > 19.00


23 | Interest Rate | 2000 - 2019 | in %




Notes and sources

Long-term chart period from 2000 to 2019 unless otherwise stated. All monetary sector data are from the Central Bank of the Russian Federation (CBR). Forecasts are based on FocusEconomics Consensus Forecast.23 Interest rate, 1-Week Repo Rate in % (eop).24 Quarterly interest rate, 1-Week Repo Rate in % (eop).25 Interest rate, evolution of 2015 forecasts during the last 18 months. 26 Interest rate, evolution of 2016 forecasts during the last 18 months.27 Interest rate, panelist distribution of 2015 forecasts. Concentration of panelists in forecast


Individual Forecasts 2015 2016Alfa-Bank - -Allianz - -BCS - -Berenberg - -BofA Merrill Lynch 9.00 7.00Capital Economics 12.00 9.00Citigroup Global Mkts 12.00 -Credit Agricole 9.00 8.00Credit Suisse 10.50 9.00Danske Bank 12.00 -DekaBank - -Deutsche Bank 13.00 9.00EIU - -Frontier Strategy Group - -Goldman Sachs 11.00 7.00HSBC 10.00 5.50ING 9.00 6.00JPMorgan 10.00 8.00KBC 14.00 -KUKE S.A. 14.00 12.00Macro-Advisory Ltd. 12.00 8.00Nomura 12.00 8.00Nordea 12.00 9.00OTP Bank 10.50 7.50Oxford Economics - -Raiffeisen Research 11.00 10.00Renaissance Capital 10.00 6.00Rosbank 13.00 7.00Scotiabank - -SEB - -UBS 13.50 7.00UniCredit 11.00 7.00VTB Capital - -WIIW - -SummaryMinimum 9.00 5.50Maximum 14.00 12.00Median 11.50 8.00Consensus 11.39 7.89History30 days ago 11.64 7.8260 days ago 12.28 7.9190 days ago 12.33 8.81


Interest Rate | 1-Week Repo Rate

0

10

20

30



0

10

20

30

2000 2005 2010 2015


0

5

10

15



0

5

10

15

20

Q1 12 Q1 13 Q1 14 Q1 15 Q1 16




April 2015

0%

20%

40%

60%

80%

< 30.0 40.0 50.0 60.0 70.0 80.0 90.0 100.0 > 100.0


28 | Exchange Rate | RUB per USD

30 | RUB per USD 2015 | evol. of fcst

29 | Exchange Rate | RUB per USD

31 | RUB per USD 2016 | evol. of fcst

Notes and sources

Long-term chart period from 2000 to 2019 unless otherwise stated. All monetary sector data are from Thomson Reuters. Forecasts based on FocusEconomics Consensus Forecast.28 Exchange rate, RUB per USD (eop).29 Quarterly exchange rate, RUB per USD (eop).30 Exchange rate, evolution of 2015 forecast during the last 18 months.31 Exchange rate, evolution of 2016 forecast during the last 18 months.32 Exchange rate, panelist distribution of 2015 forecasts. Concentration of panelists in forecast


Individual Forecasts 2015 2016Alfa-Bank 55.0 50.0Allianz 59.0 55.0BCS - -Berenberg - -BofA Merrill Lynch 55.0 55.0Capital Economics - -Citigroup Global Mkts 70.2 68.0Credit Agricole 55.0 53.0Credit Suisse 65.0 63.0Danske Bank 80.0 -DekaBank - -Deutsche Bank 55.6 -EIU 58.5 51.3Frontier Strategy Group - -Goldman Sachs 60.0 55.0HSBC 80.0 78.0ING 53.3 48.8JPMorgan 60.0 60.0KBC - -KUKE S.A. - -Macro-Advisory Ltd. - -Nomura 70.0 65.0Nordea 62.0 51.0OTP Bank - -Oxford Economics 57.1 48.3Raiffeisen Research 73.5 69.0Renaissance Capital 53.0 50.8Rosbank 65.4 57.0Scotiabank 60.0 55.0SEB 55.0 50.0UBS 57.4 61.6UniCredit 70.2 69.1VTB Capital 56.0 57.2WIIW 60.0 65.0SummaryMinimum 53.0 48.3Maximum 80.0 78.0Median 60.0 55.0Consensus 61.8 58.1History30 days ago 61.0 58.560 days ago 57.7 55.890 days ago 49.8 48.8

32 | RUB per USD 2015 | Panelist Distribution

Exchange Rate | RUB per USD

20

40

60

80

100



20

30

40

50

60

70

2000 2005 2010 2015

20

40

60

80

100



20

30

40

50

60

70

Q1 12 Q1 13 Q1 14 Q1 15 Q1 16



April 2015


140

160

180

200


2015 2016


0

200

400

600

2000 2005 2010 2015


35 | Trade Balance | USD bn

-5

0

5

10

15

20

2000 2005 2010 2015



0

1

2

3

4


2015 2016



Individual Forecasts 2015 2016 2015 2016Alfa-Bank 9.8 4.6 - -Allianz 3.1 4.5 155 185BCS 3.8 3.6 96 128Berenberg - - - -BofA Merrill Lynch 3.8 2.8 85 87Capital Economics 2.0 2.0 - -Citigroup Global Mkts 4.1 3.5 180 175Credit Agricole 4.8 3.7 - -Credit Suisse 3.6 4.2 - -Danske Bank 0.4 0.0 - -DekaBank 3.2 4.1 - -Deutsche Bank 3.6 4.3 153 172EIU 3.2 4.3 154 198Frontier Strategy Group - - - -Goldman Sachs 4.9 2.0 - -HSBC 11.3 12.7 175 176ING - - - -JPMorgan 5.5 3.5 - -KBC - - - -KUKE S.A. 2.3 2.2 170 180Macro-Advisory Ltd. 2.0 2.0 150 145Nomura 2.7 2.2 - -Nordea 1.9 1.2 - -OTP Bank 0.2 0.0 - -Oxford Economics 4.4 6.9 141 192Raiffeisen Research 5.0 3.5 122 109Renaissance Capital 4.1 4.0 146 167Rosbank 1.7 - 91 -Scotiabank 3.0 3.5 - -SEB 3.2 2.5 - -UBS 5.7 5.7 - -UniCredit 4.3 1.7 196 173VTB Capital 7.4 5.9 174 180WIIW 2.7 2.0 132 121SummaryMinimum 0.2 0.0 85 87Maximum 11.3 12.7 196 198Median 3.6 3.5 152 173Consensus 3.9 3.6 145 159History30 days ago 3.7 3.2 147 15960 days ago 3.8 3.1 148 16090 days ago 3.4 2.6 187 183

Current Account Trade Balance% of GDP USD bn

Notes and sources

Long-term chart period from 2000 to 2019 unless otherwise stated. All external sector data are from the Central Bank of the Russian Federation (CBR), the Federal State Statistics Service (Rosstat) and the Ministry of Economic Development. See below for details. Forecasts based on FocusEconomics Consensus Forecast.33 Current account balance, as % of GDP.34 Current account balance, evolution of 2015 and 2016 forecasts during the last 18 months.35 Trade balance, exports and imports, in USD. Rosstat and Ministry of Economic Development. 36 Trade balance, evolution of 2015 and 2016 forecasts during the last 18 months.



April 2015


Exports and Imports

Individual Forecasts 2015 2016 2015 2016Alfa-Bank - - - -Allianz 405 450 250 265BCS 310 418 214 290Berenberg - - - -BofA Merrill Lynch 250 276 164 190Capital Economics - - - -Citigroup Global Mkts 520 536 341 361Credit Agricole - - - -Credit Suisse - - - -Danske Bank - - - -DekaBank - - - -Deutsche Bank 381 402 228 231EIU 351 417 197 219Frontier Strategy Group - - - -Goldman Sachs - - - -HSBC 358 375 182 199ING - - - -JPMorgan - - - -KBC - - - -KUKE S.A. 450 480 280 300Macro-Advisory Ltd. 530 515 380 370Nomura - - - -Nordea - - - -OTP Bank - - - -Oxford Economics 319 378 178 186Raiffeisen Research 324 327 202 218Renaissance Capital 380 453 234 286Rosbank 376 - 285 -Scotiabank - - - -SEB - - - -UBS - - - -UniCredit 458 444 262 271VTB Capital 368 412 194 233WIIW 352 363 220 242SummaryMinimum 250 276 164 186Maximum 530 536 380 370Median 372 417 224 242Consensus 383 416 238 257History30 days ago 391 420 246 26160 days ago 394 425 248 26590 days ago 469 486 282 303

Exports ImportsUSD bn USD bn

Notes and sources

Long-term chart period from 2000 to 2019 unless otherwise stated. All external sector data are from the Federal State Statistics Service (Rosstat) and the Ministry of Economic Development. Forecasts based on FocusEconomics Consensus Forecast.37 Exports, annual variation in %. 38 Exports, evolution of 2015 and 2016 forecasts during the last 18 months.39 Imports, annual variation in %. 40 Imports, evolution of 2015 and 2016 forecasts during the last 18 months.

200

300

400

500


2015 2016


-40

-20

0

20

40

2000 2005 2010 2015



-40

-20

0

20

40

2000 2005 2010 2015



300

400

500

600


2015 2016




April 2015


500

600

700

800

900


2015 2016


20

30

40

50

60

70

2000 2005 2010 2015

Russia

Eastern Europe


5

10

15

20

25

30

2000 2005 2010 2015



300

400

500

600


2015 2016



Individual Forecasts 2015 2016 2015 2016Alfa-Bank - - - -Allianz 270 270 530 510BCS - - - -Berenberg - - - -BofA Merrill Lynch 340 320 - -Capital Economics - - - -Citigroup Global Mkts 357 352 594 618Credit Agricole - - - -Credit Suisse - - 601 548Danske Bank - - - -DekaBank - - - -Deutsche Bank 350 346 520 470EIU - - - -Frontier Strategy Group - - - -Goldman Sachs - - - -HSBC 308 278 633 620ING - - - -JPMorgan 335 317 524 492KBC - - - -KUKE S.A. 375 400 620 650Macro-Advisory Ltd. 345 350 520 600Nomura 330 310 - -Nordea - - - -OTP Bank - - - -Oxford Economics 304 263 539 480Raiffeisen Research 308 210 595 421Renaissance Capital 330 315 521 510Rosbank 300 - 500 -Scotiabank - - - -SEB - - - -UBS - - - -UniCredit - - 545 532VTB Capital - - - -WIIW - - - -SummaryMinimum 270 210 500 421Maximum 375 400 633 650Median 330 316 539 521Consensus 327 311 557 538History30 days ago 345 334 565 55760 days ago 341 333 575 57390 days ago 392 399 628 622

Int. Reserves External DebtUSD bn USD bn

Notes and sources

Long-term chart period from 2000 to 2019 unless otherwise stated. All external sector data are from the Central Bank of the Russian Federation (CBR). Forecasts are based on FocusEconomics Consensus Forecast.41 International reserves, months of imports. 42 International reserves, evolution of 2015 and 2016 forecasts during the last 18 months.43 External debt as % of GDP. 44 External debt, evolution of 2015 and 2016 forecasts during the last 18 months.



April 2015

Russia in the Region


Fact Sheet

Russia 45.6%

Turkey 18.1%

Poland 12.4%

Czech Republic

4.7%

Romania 4.5%

Other14.7%

Russia 38.8%

Turkey 20.9%

Ukraine 12.2%

Poland 10.4%

Romania 5.4%

Other12.3%

Ukraine5.7%

Other EU-27

29.8%

Germany12.1%Other Asia

ex-Japan7.4%

China16.3%

Other28.7%

Turkey5.2%

Ukraine5.2%

Other EU-27

25.4%

Netherlands14.7%Germany

6.7%

Italy6.2%

Other Asia ex-Japan

5.8%

China6.8%

Other24.1%

Other14.7%


Food12.9%Other

18.5%


Mineral Fuels67.6%

Trade Structure



Economic Structure


Exports

Exports

Imports

Imports

General Data


Political Data



• Substantial oil and gas wealth • Dependence on oil exports• Persistent inflation• Financial system vulnerability

• Rich in natural resources • Weak democratic institutions• Rapidly ageing population

• Strong international reserves position

Energy (2012) Primary Energy Production (trillion Btu): 55,296Primary Energy Consumption (trillion Btu): 31,522Electricity Generation (billion kW-h): 1,012Electricity Consumption (billion kW-h): 889Oil Supply (thousand bpd): 10,397Oil Consumption (thousand bpd): 3,395CO2 Emmissions (million metric tons): 1,782

Agency Rating OutlookMoody’s: Ba1 NegativeS&P: BB+ NegativeFitch Ratings: BBB- Negative


Transportation (2013) Airports: 1,218Railways (km): 87,157Roadways (km): 1,283,387Waterways (km): 102,000Chief Ports: Kaliningrad, St. Petersburg

Official name: Russian FederationCapital: Moscow (11.6m)Other cities: St. Petersburg (4.9m)

Novosibirsk (1.5m)Area (km2): 17,098,242Population (million, 2014 est.): 144Population density (per km2, 2014): 8.4Population growth rate (%, 2014 est.): 0.0Life expectancy (years, 2014 est.): 70.16Illiteracy rate (%, 2010): 0.3Language: RussianMeasures: Metric SystemTime: GMT+3 to GMT+12

President: Vladimir PutinLast elections: 4 March 2012Next elections: 2018Central Bank President: Elvira Nabiullina

0

20

40

60

80

1002004-06 2007-09 2010-12

Net Exports

Investment


PrivateConsumption

0

20

40

60

80

1002004-06 2007-09 2010-12

Agriculture

Manufacturing

Other Industry

Services

FOCUSECONOMICS Slovakia


April 2015

Slovakia Slovakia’s economy recorded the largest expansion in three years

in 2014, which was mainly driven by a rebound in investment and an expansion in private consumption supported by improving labor market conditions. Growth momentum remains strong at the beginning of 2015, as industrial production expanded in February at the fastest pace since July 2014.

Recovery in the Eurozone as well as the depreciation of the euro should support Slovakia’s external sector in the coming years. Continuous improvement in the labor market and increased real household income due to low energy prices are also expected to contribute to growth. FocusEconomics Consensus Forecasts panelists expect GDP to expand 2.6% in 2015, which is unchanged from last month’s forecast. For 2016, the panel sees economic growth picking up to 2.9%.

Harmonized consumer prices declined 0.6% annually in February, marking the third consecutive decrease and the largest drop in more than fifteen years (January: -0.5% year-on-year). The FocusEconomics Consensus Forecast panel expects HICP inflation to average 0.2% this year before rising to 1.6% in 2016.

REAL SECTOR | Industrial production growth accelerates in FebruaryIndustrial production increased 3.2% annually in February, marking an acceleration compared to the 2.1% growth tallied in January. The increase marked a seven-month high. According to the statistical office, February’s result reflected an increase in electricity, gas and air-conditioning supply, as well as in manufacturing and in mining and quarrying.

On a monthly basis, industrial production rose 0.5% in seasonally-adjusted terms in February, which contrasted the 0.1% decline tallied in January. Despite February’s increase, annual average growth in industrial production declined from 3.5% in January to 3.1% in February.

FocusEconomics Consensus Forecast panelists expect industrial production to increase 4.6% in 2015, which is down 0.2 percentage points from last month’s forecast. For 2016, the panel sees industrial output expanding 5.3%.

The National Bank of Slovakia (NBS) projects that GDP will grow 3.2% in 2015 and 3.8% in 2016. FocusEconomics Consensus Forecast panelists expect GDP growth to reach 2.6% in 2015, which is unchanged from last month’s forecast. For 2016, the panel projects that economic growth will increase to 2.9%.

Outlook stable


Eric Denis Economist

Slovakia

2011-13 2014-16 2017-19Population (million): 5.4 5.4 5.4GDP (EUR bn): 72.0 77.8 89.2GDP per capita (EUR): 13,323 14,346 16,385GDP growth (%): 1.4 2.9 2.8Fiscal Balance (% of GDP): -3.6 -2.6 -1.6Public Debt (% of GDP): 50.1 55.2 54.0Inflation (%): 1.5 1.6 2.0Current Account (% of GDP): 0.2 2.4 2.2


Note: Year-on-year and annual average variation of industrial production index in %.Source: Statistical Office of the Slovak Republic (SOSR) and FocusEconomics calculations.

-5

0

5

10

15



%



April 2015

MONETARY SECTOR | Consumer prices record largest year-on-year drop in over five years in FebruaryIn February, consumer prices fell 0.2% over the previous month, which came in just below the 0.1% drop tallied in January. February’s reading mainly reflected lower prices for transport, as well as for food and beverages and for clothing and footwear. Conversely, prices for healthcare and housing equipment were higher than in the previous month.

Consumer prices declined 0.3% in February compared to the same month of last year, which was down from the 0.2% decrease registered in January and marked the largest drop in over five years. Meanwhile, the harmonized index of consumer prices fell 0.18% in monthly terms in February, which was slightly down from January’s 0.12% fall. Annual harmonized consumer prices dropped 0.6%, which followed the 0.5% decrease tallied in the previous month.

The National Bank of Slovakia expects consumer prices to drop 0.3% on average in 2015. For 2016, the NBS expects inflation to average 1.7% in 2016. FocusEconomics Consensus Forecast participants expect HICP inflation to average 0.2% in 2015, which is down 0.2 percentage points from last month’s forecast. For 2016, the panel expects HICP inflation to increase to 1.6%.


Note: Month-on-month and year-on-year variation of consumer price index in %.Source: Statistical Office of the Slovak Republic (SOSR).

-1.0

0.0

1.0

2.0

3.0

-0.4

-0.2

0.0

0.2

0.4




%%



April 2015


Annual Data 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019Real Sector Population (million) 5.4 5.4 5.4 5.4 5.4 5.4 5.4 5.4 5.4 5.5GDP per capita (USD) 16,441 18,115 17,172 18,063 18,448 15,233 15,729 17,155 18,848 20,381GDP (USD bn) 89.1 97.7 92.8 97.7 99.9 82.6 85.4 93.3 102.6 111.1GDP per capita (EUR) 12,395 13,012 13,358 13,601 13,885 14,262 14,890 15,611 16,390 17,154GDP (EUR bn) 67.2 70.2 72.2 73.6 75.2 77.4 80.9 84.9 89.2 93.5Economic Growth (Nominal GDP, ann. var. in %) 5.3 4.4 2.9 2.0 2.2 2.8 4.5 5.0 5.1 4.8Economic Growth (GDP, annual var. in %) 4.8 2.7 1.6 1.4 2.4 2.6 2.9 3.0 3.0 2.8Private Consumption (annual var. in %) 0.1 -0.7 -0.5 -0.8 2.2 2.6 2.6 2.5 2.5 2.5Government Consumption (ann. var. in %) 1.7 -2.1 -2.0 2.4 4.4 - - - - -Fixed Investment (annual var. in %) 7.2 12.7 -9.3 -2.7 5.7 3.5 4.2 3.8 3.5 3.1Industrial Production (annual var. in %) 8.2 5.3 8.0 5.2 3.7 4.6 5.3 5.1 4.4 3.6Retail Sales (annual variation in %) -2.3 -2.7 -0.9 0.1 3.6 3.5 4.0 3.8 3.4 3.3Unemployment (% of active population, aop) 12.5 13.2 13.6 14.1 12.8 12.4 11.8 11.4 10.6 9.8Fiscal Balance (% of GDP) -7.5 -4.1 -4.2 -2.6 -3.0 -2.7 -2.2 -1.9 -1.8 -1.1Public Debt (% of GDP) 41.1 43.5 52.1 54.6 54.9 55.5 55.1 54.6 54.3 53.0Monetary and Financial Sector Money (annual variation of M2 in %, eop) 2.5 3.9 7.3 6.2 5.3 - - - - -Inflation (CPI, annual variation in %, eop) 1.9 2.3 3.0 0.4 0.2 - - - - -Inflation (HICP, annual variation in %, aop) 0.7 4.1 3.8 1.5 -0.1 0.2 1.6 2.0 2.1 2.0Inflation (PPI, annual variation in %, aop) 0.2 2.3 3.9 -0.1 -3.5 - - - - -ECB Refinancing Rate (%, eop) 1.00 1.00 0.75 0.25 0.05 0.05 0.05 0.39 0.76 1.543-Month EURIBOR (%, eop) 1.01 1.36 0.19 0.29 0.08 0.03 0.06 0.62 1.00 1.57Exchange Rate (USD per EUR, eop) 1.34 1.30 1.32 1.38 1.21 1.04 1.07 1.13 1.17 1.20Exchange Rate (USD per EUR, aop) 1.33 1.39 1.29 1.33 1.33 1.07 1.06 1.10 1.15 1.19External Sector Current Account Balance (% of GDP) -3.7 -3.7 2.2 2.1 2.1 2.7 2.3 2.2 2.2 2.2Current Account Balance (EUR bn) -2.5 -2.6 1.6 1.5 1.6 2.1 1.8 1.9 2.0 2.1Merchandise Trade Balance (EUR bn) -0.1 0.0 2.5 3.4 3.3 3.5 3.5 3.5 3.4 3.2Merchandise Exports (EUR bn) 46.5 54.7 60.2 62.3 62.7 67.1 70.9 74.8 78.4 82.2Merchandise Imports (EUR bn) 46.6 54.7 57.7 58.9 59.3 63.6 67.4 71.1 74.9 78.8Merchandise Exports (annual variation in %) 21.3 17.6 10.0 3.5 0.6 7.1 5.6 5.5 4.9 4.8Merchandise Imports (annual variation in %) 22.3 17.4 5.4 2.2 0.7 7.2 6.1 5.5 5.3 5.2External Debt (EUR bn) 49.6 49.2 55.2 62.0 60.5 79.8 80.2 81.7 80.9 79.6External Debt (% of GDP) 73.8 70.1 76.4 84.2 80.5 103.1 99.2 96.3 90.7 85.1

Quarterly Data Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16Economic Growth (GDP, annual var. in %) 2.4 2.4 2.5 2.6 2.8 3.0 2.9 2.8 2.8 2.8Economic Growth (GDP, s.a. qoq var. in %) 0.6 0.6 - - - - - - - -Inflation (HICP, annual variation in %, aop) -0.2 0.0 0.1 0.2 0.4 1.0 1.1 1.5 1.8 2.3ECB Refinancing Rate (%, eop) 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.053-Month EURIBOR (%, eop) 0.08 0.08 0.02 0.03 0.03 0.03 0.06 0.06 0.07 0.06Exchange Rate (USD per EUR, eop) 1.26 1.21 1.07 1.05 1.04 1.04 1.05 1.06 1.06 1.07 Monthly Data Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15Industrial Production (annual variation in %) 8.4 4.6 2.7 0.2 3.1 -3.6 2.7 2.1 3.2 -Unemployment (% of active population) 12.8 12.7 12.6 12.4 12.3 12.2 12.3 12.4 12.3 -Inflation (CPI, mom variation in %) 0.1 -0.1 -0.2 0.1 0.1 -0.1 -0.3 -0.1 -0.2 -Inflation (CPI, annual variation in %) 0.1 0.0 0.0 0.0 0.2 0.3 0.2 -0.2 -0.3 -Inflation (HICP, annual variation in %) -0.1 -0.2 -0.2 -0.1 0.0 0.0 -0.1 -0.5 -0.6 -Exchange Rate (USD per EUR, eop) 1.37 1.34 1.32 1.26 1.25 1.25 1.21 1.13 1.12 1.07



April 2015


1 | Real GDP | 2000 - 2019 | var. in %








General: Long-term chart period from 2000 to 2019 unless otherwise stated. All real sector data are from the Statistical Office of the Slovak Republic (SOSR, Statisticky urad Slovenskej republiky). Forecasts based on FocusEconomics Consensus Forecast. 1 GDP, annual variation in %. 2 Quarterly GDP (not seasonally adjusted), year-on-year variation in %. 3 GDP, evolution of 2015 forecasts during the last 18 months.4 GDP, evolution of 2016 forecasts during the last 18 months.5 Unemployment, % of active population. 6 Balance of non-financial public sector as % of GDP.7 Unemployment, evolution of 2015 and 2016 forecasts during the last 18



Individual Forecasts 2015 2016 2015 2016Capital Economics 2.5 3.0 -2.3 -2.3Citigroup Global Mkts 2.9 3.3 -2.8 -2.1CSOB 2.4 2.8 -2.9 -3.0DekaBank 2.6 2.9 -2.8 -2.6EIU 2.7 2.9 -2.5 -2.3Erste Bank 2.5 3.0 -2.5 -2.0Experian 3.0 3.4 -2.5 -2.2Frontier Strategy Group 2.0 2.3 - -Komerční Banka 2.7 2.7 -2.8 -2.5OTP Bank 2.6 2.8 -2.8 -2.7Oxford Economics 2.8 3.2 -2.9 -1.9Raiffeisen Research 2.5 3.0 -2.5 -1.2UniCredit 2.9 3.2 -2.5 -1.5VÚB Banka 2.7 2.8 - -WIIW 2.5 2.7 -2.8 -2.6SummaryMinimum 2.0 2.3 -2.9 -3.0Maximum 3.0 3.4 -2.3 -1.2Median 2.6 2.9 -2.8 -2.3Consensus 2.6 2.9 -2.7 -2.2History30 days ago 2.6 3.0 -2.5 -2.260 days ago 2.6 3.0 -2.5 -2.090 days ago 2.6 3.0 -2.5 -2.1Additional ForecastsCentral Bank (Apr. 2015) 3.2 3.8 - -Euro. Comm. (Feb. 2015) 2.5 3.2 - -IMF (Oct. 2014) 2.7 2.9 - -


-10

-5

0

5

10

15

2000 2005 2010 2015

SlovakiaEastern EuropeWorld

5

10

15

20

2000 2005 2010 2015

SlovakiaEastern Europe

-1

0

1

2

3

4

Q1 12 Q1 13 Q1 14 Q1 15 Q1 16

SlovakiaEastern EuropeWorld

2.0

2.5

3.0

3.5

4.0



1

2

3

4



11.5

12.0

12.5

13.0

13.5

14.0


2015 2016

-3.0

-2.8

-2.6

-2.4

-2.2

-2.0


2015 2016

-15

-10

-5

0

5

2000 2005 2010 2015




April 2015


Consumer Price Index and Current Account Balance

Notes and sources

General: Long-term chart period from 2000 to 2019 unless otherwise stated. All monetary and external sector data are from the Statistical Office of the Slovak Republic (SOSR, Statisticky urad Slovenskej republiky) and the Bank of Slovakia (NBS, Narodna banka Slovenska). Forecasts based on FocusEconomics Consensus Forecast. 9 Inflation, annual average variation of harmonized index of consumer prices (HICP) in %.

Source: SOSR.10 Inflation, annual variation of quarterly average harmonized index of consumer prices (HICP).

Source: SOSR.11 Inflation, evolution of 2015 forecasts during the last 18 months.12 Inflation, evolution of 2016 forecasts during the last 18 months.13 Current account balance as % of GDP. Source: NBS.14 Current account balance as % of GDP, evolution of 2015 and 2016 forecasts during the last

18 months.

Individual Forecasts 2015 2016 2015 2016Capital Economics -0.3 1.5 2.8 1.8Citigroup Global Mkts - - - -CSOB 0.2 1.5 3.0 2.0DekaBank 0.1 1.2 - -EIU 0.3 1.7 - -Erste Bank 0.0 1.5 2.9 3.1Experian 0.8 1.9 3.5 3.2Frontier Strategy Group - - - -Komerční Banka 0.0 1.4 2.0 1.4OTP Bank - - 2.1 1.8Oxford Economics 0.4 1.9 2.6 2.5Raiffeisen Research 0.7 2.0 - -UniCredit 0.1 1.7 - -VÚB Banka 0.0 1.4 - -WIIW 0.4 1.4 - -SummaryMinimum -0.3 1.2 2.0 1.4Maximum 0.8 2.0 3.5 3.2Median 0.2 1.5 2.8 2.0Consensus 0.2 1.6 2.7 2.3History30 days ago 0.4 1.7 2.4 2.060 days ago 0.6 1.8 2.5 2.090 days ago 0.9 1.8 2.1 1.9Additional ForecastsCentral Bank (Apr. 2015) -0.3 1.7 - -Euro. Comm. (Feb. 2015) 0.4 1.3 - -IMF (Oct. 2014) 1.3 1.5 - -


9 | Inflation | 2000 - 2019 | in %



10 | Inflation | Q1 12-Q4 16 | in %



-10

-5

0

5

2000 2005 2010 2015


1

2

3

4


2015 2016

-10

0

10

20

30

2000 2005 2010 2015


-5

0

5

10

Q1 12 Q1 13 Q1 14 Q1 15 Q1 16


-1

0

1

2

3

4



0

1

2

3

4





April 2015

Fact Sheet

Slovakia in the Region


Slovakia 2.3%

Russia 45.8%

Turkey 18.2%

Poland 12.4%

Czech Republic

4.6%

Other16.8%

Slovakia 1.5%

Russia 38.8%

Turkey 20.9%

Ukraine 12.2%

Poland 10.4%

Other16.2%

Russia10.1%

Other EU-27

24.3%

Germany18.6%

Czech Rep.17.8%

Austria8.0%

Asia ex-Japan9.3%

Other11.9%

Other EU-27

35.3%

Germany22.4%

Czech Rep.14.8%

Poland8.8%

Other18.7%

Other5.3%


Mineral Fuels13.6%

Food6.5%

Other9.3%


Mineral Fuels5.6%

Trade Structure



Economic Structure


Exports

Exports

Imports

Imports

-20

0

20

40

60

80

100

1202003-05 2006-08 2009-11

Net Exports

Investment


PrivateConsumption

0

20

40

60

80

1002002-04 2005-07 2008-10

Agriculture

Manufacturing

Other Industry

Services

General Data


Political Data



• Small domestic market• Rising labor costs

• Strong export sector

• European Monetary Union membership accelerated implementation of reforms

• Attractive business environment


Agency Rating OutlookMoody’s: A2 StableS&P: A PositiveFitch Ratings: A+ Stable


Transportation (2013) Airports: 35Railways (km): 3,622Roadways (km): 43,916Waterways (km): 172Chief Ports: Bratislava, Komarno

Official name: Slovak RepublicCapital: Bratislava (0.6m)Other cities: Kosice (0.8m)Area (km2): 49,035Population (million, 2014 est.): 5.4Population density (per km2, 2014): 110.5Population growth rate (%, 2014 est.): 0.0Life expectancy (years, 2014 est.): 76.7Illiteracy rate (%, 2004): 0.4Language: SlovakMeasures: Metric systemTime: GMT+1

Prime Minister: Robert FicoLast elections: 10 March 2012Next elections: 15 March 2016Central Bank President: Jozef Makuch

FOCUSECONOMICS Slovenia


April 2015

Slovenia

REAL SECTOR | Growth in industrial output slows in FebruaryIn February, industrial production expanded by 5.8% over the same month last year. The print matched the growth rate tallied in January. According to the statistical office, February’s reading reflected a deceleration in manufacturing and a contraction in electricity, gas and water supply.

On a monthly basis, industrial output declined a seasonally-adjusted 0.2% in February, which largely contrasted the 4.0% increase recorded in the previous month and marked a three-month low.

FocusEconomics Consensus Forecast panelists expect industrial production to expand 2.6% in 2015, which is down 0.3 percentage points over last month’s Consensus. For 2016, the panel sees industrial output growth at 2.8%.

The Central Bank expects the economy to expand 2.2% in 2015. Growth is expected to slow to a 1.8% expansion in 2016. FocusEconomics Consensus Forecast panelists expect the economy to increase 2.0% in 2015, which is unchanged from last month’s estimate. In 2016, the panel sees GDP expanding 2.1%.

Slovenia’s economy expanded at the fastest pace since 2008 last year and is expected to maintain healthy, albeit weaker, growth in 2015. The likely slowdown will be driven by government spending cuts that are necessary to reduce the public deficit. The latest economic data confirmed that Slovenia’s economic outlook is positive: industrial production showed solid growth for a second consecutive month in February.

The depreciation of the euro and the ongoing recovery in the Eurozone should support the country’s external sector. In addition, private consumption is expected to grow at a faster pace thanks to an improving labor market. FocusEconomics Consensus Forecast panelists see the economy expanding 2.0% in 2015, which is unchanged from last month’s forecast. For 2016, the panel also expects GDP to expand 2.1%.

Harmonized consumer prices fell 0.4% year-on-year in March, which followed the 0.5% decrease tallied in February. Inflationary pressures are expected to remain subdued in 2015 due to lower oil prices. Panelists expect HICP inflation to average 0.3% in 2015, which is down 0.2 percentage points from last month’s forecast. In 2016, the panel foresees inflation rising to 1.3%.

Outlook stable


Eric DenisEconomist

Slovenia

2011-13 2014-16 2017-19Population (million): 2.1 2.1 2.1GDP (EUR bn): 36.3 38.3 42.8GDP per capita (EUR): 17,687 18,520 20,642GDP growth (%): -1.0 2.1 2.4Fiscal Balance (% of GDP): -8.2 -3.8 -2.7Public Debt (% of GDP): 56.7 79.9 79.4Inflation (%): 1.9 1.3 2.4Current Account (% of GDP): 2.8 5.3 3.9


Note: Year-on-year and annual average growth of industrial production index in %.Source: Statistical Office of the Republic of Slovenia (SORS).

-6.0

-3.0

0.0

3.0

6.0



%



April 2015

MONETARY SECTOR | Decrease in consumer prices moderates in MarchConsumer prices rose 0.9% in March over the previous month, which marked the highest increase in 30 months. The monthly reading mostly reflected a large increase in the prices of garments and footwear due to the new spring-summer collection, as well as higher prices for fuels.

Annual consumer prices fell 0.3% in March, which followed the 0.4% decline tallied in February and was the highest result in the last three months. Meanwhile, annual harmonized consumer prices fell 0.4%, which followed the 0.5% decrease observed in the previous month. Annual average HICP inflation inched down from 0.2% in February to 0.1% in March.

The Central Bank expects HICP consumer prices to fall 0.1% on average in 2015. For 2016, the Bank expects inflation to average 1.1%. FocusEconomics Consensus Forecast participants expect HICP inflation to average 0.3% in 2015, which is down 0.2 percentage points over the previous month’s forecast. In 2016, the panel expects HICP inflation to accelerate to 1.3%.


Note: Year-on-year and month-on-month variation of consumer price index in %.Source: Statistical Office of the Republic of Slovenia (SORS).

-1.0

0.0

1.0

2.0

3.0

-2.0

-1.0

0.0

1.0

2.0




%%



April 2015


Annual Data 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019Real Sector Population (million) 2.0 2.1 2.1 2.1 2.1 2.1 2.1 2.1 2.1 2.1GDP per capita (USD) 23,141 25,063 22,292 23,225 24,045 19,712 20,111 21,690 23,705 25,634GDP (USD bn) 47.4 51.4 45.8 47.8 49.6 40.7 41.6 44.9 49.2 53.3GDP per capita (EUR) 17,694 17,985 17,523 17,552 18,065 18,456 19,038 19,738 20,614 21,575GDP (EUR bn) 36.2 36.9 36.0 36.1 37.3 38.1 39.4 40.9 42.8 44.9Economic Growth (Nom. GDP, ann. var. in %) 0.1 1.8 -2.3 0.4 3.1 2.3 3.4 3.8 4.6 4.8Economic Growth (GDP, annual var. in %) 1.2 0.6 -2.6 -1.0 2.6 2.0 2.1 2.2 2.4 2.4Private Consumption (annual var. in %) 1.0 0.0 -3.0 -4.0 0.3 1.0 1.4 1.7 2.1 2.2Government Consumption (annual var. in %) 0.1 -1.3 -1.5 -1.1 -0.5 - - - - -Fixed Investment (annual var. in %) -13.7 -4.6 -8.9 1.9 4.8 2.9 3.2 4.6 4.9 5.0Industrial Production (annual var. in %) 7.0 2.1 -0.7 -1.1 1.5 2.6 2.8 3.5 3.6 3.6Unemployment (% of active population, aop) 7.3 8.2 9.0 10.1 9.7 9.2 8.7 8.5 8.5 8.2Fiscal Balance (% of GDP) -5.7 -6.2 -3.7 -14.6 -4.8 -3.6 -3.0 -3.0 -2.7 -2.5Public Debt (% of GDP) 37.9 46.2 53.4 70.4 79.0 80.5 80.0 79.7 79.3 79.2Monetary and Financial Sector Money (annual variation of M2 in %) 1.6 2.5 -1.0 -1.3 6.7 - - - - -Inflation (CPI, annual variation in %, eop) 1.9 2.0 2.7 0.7 0.2 - - - - -Inflation (HICP, annual variation in %, aop) 2.1 2.1 2.8 1.9 0.4 0.3 1.3 1.7 2.2 2.4Inflation (PPI, annual variation in %, aop) 2.1 4.5 0.9 0.0 -0.6 - - - - -ECB Refinancing Rate (%, eop) 1.00 1.00 0.75 0.25 0.05 0.05 0.05 0.39 0.76 1.543-Month EURIBOR (%, eop) 1.01 1.36 0.19 0.29 0.08 0.03 0.06 0.62 1.00 1.5710-Year Bond Yield (%, eop) 4.11 6.90 5.33 5.27 2.11 - - - - -Exchange Rate (USD per EUR, eop) 1.34 1.30 1.32 1.38 1.21 1.04 1.07 1.13 1.17 1.20Exchange Rate (USD per EUR, aop) 1.33 1.39 1.29 1.33 1.33 1.07 1.06 1.10 1.15 1.19External Sector Current Account Balance (% of GDP) -0.1 0.2 2.7 5.6 5.8 5.3 4.9 4.5 3.7 3.5Current Account Balance (EUR bn) 0.0 0.1 1.0 2.0 2.2 2.0 1.9 1.9 1.6 1.6Merchandise Trade Balance (EUR bn) -0.7 -1.0 0.0 0.8 1.3 1.3 1.3 1.1 1.1 1.1Merchandise Exports (EUR bn) 18.6 21.0 21.3 21.7 23.1 25.0 27.6 29.5 31.3 32.9Merchandise Imports (EUR bn) 19.3 22.0 21.3 20.9 21.8 23.8 26.3 28.4 30.2 31.8Merchandise Exports (annual variation in %) 14.1 12.9 1.4 1.9 6.5 8.3 10.3 6.9 6.1 5.1Merchandise Imports (annual variation in %) 15.6 14.0 -3.2 -1.9 4.3 9.0 10.5 8.0 6.4 5.5External Debt (EUR bn) 41.0 40.0 42.0 40.0 46.0 44.2 45.5 47.4 49.3 51.4External Debt (% of GDP) 113 108 117 111 123 116 115 116 115 115 Quarterly Data Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16Economic Growth (GDP, annual var. in %) 3.2 2.4 2.3 2.0 2.0 2.1 2.3 2.3 2.1 2.0Economic Growth (GDP, s.a. qoq var. in %) 0.6 0.3 - - - - - - - -Inflation (HICP, annual variation in %, aop) 0.1 0.0 -0.5 0.4 0.5 0.6 1.1 1.2 1.4 1.5ECB Refinancing Rate (%, eop) 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.053-Month EURIBOR (%, eop) 0.08 0.08 0.02 0.03 0.03 0.03 0.06 0.06 0.07 0.06Exchange Rate (USD per EUR, eop) 1.26 1.21 1.07 1.05 1.04 1.04 1.05 1.06 1.06 1.07 Monthly Data Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15Industrial Production (annual variation in %) 2.7 5.8 1.4 0.8 3.6 2.5 0.3 5.8 5.8 -Unemployment (% of active population) 9.6 9.7 9.7 9.6 9.6 9.5 9.4 9.4 9.4 -Inflation (CPI, mom variation in %) 0.1 -1.1 0.0 0.3 0.2 -0.2 -0.5 -1.3 0.2 0.9Inflation (CPI, annual variation in %) 0.8 0.0 -0.3 -0.3 -0.2 -0.3 0.2 -0.5 -0.4 -0.3Inflation (HICP, annual variation in %) 1.0 0.3 0.0 -0.1 0.1 0.1 -0.1 -0.7 -0.5 -0.4Exchange Rate (USD per EUR, eop) 1.37 1.34 1.32 1.26 1.25 1.25 1.21 1.13 1.12 1.07



April 2015


1 | Real GDP | 2000-2019 | var. in %








General: Long-term chart period from 2000 to 2019 unless otherwise stated. All real sector data are from the Statistical Office of the Republic of Slovenia (SORS) and Eurostat. Forecasts based on FocusEconomics Consensus Forecast. 1 GDP, annual variation in %. Source: SORS.2 Quarterly GDP (not seasonally adjusted), year-on-year variation in %.

Source: SORS. 3 GDP, evolution of 2015 forecasts during the last 18 months.4 GDP, evolution of 2016 forecasts during the last 18 months.5 Unemployment, % of active population. Source: SORS.6 Balance of non-financial public sector as % of GDP. Source: Eurostat. 7 Unemployment, evolution of 2015 and 2016 forecasts during the last 18



Individual Forecasts 2015 2016 2015 2016Capital Economics 2.0 1.5 -3.5 -2.5Citigroup Global Mkts 2.0 2.3 -2.9 -2.5DekaBank 2.0 2.3 -2.9 -2.8EIU 2.0 1.7 -4.0 -3.8IMAD 2.4 2.0 - -Institute EIPF 2.1 2.3 -3.3 -2.7Kopint-Tárki 1.9 2.0 -3.5 -2.9Oxford Economics 2.2 2.4 -4.3 -3.3Raiffeisen Research 2.0 2.0 -4.0 -3.0UniCredit 2.1 2.6 -3.2 -2.9WIIW 1.7 1.8 -4.0 -3.5SummaryMinimum 1.7 1.5 -4.3 -3.8Maximum 2.4 2.6 -2.9 -2.5Median 2.0 2.0 -3.5 -2.9Consensus 2.0 2.1 -3.6 -3.0History30 days ago 2.0 2.1 -3.5 -2.960 days ago 2.0 2.1 -3.4 -2.890 days ago 1.8 2.0 -3.4 -2.9Additional ForecastsCentral Bank (Apr. 2015) 2.2 1.8 - -Euro. Comm. (Feb. 2015) 1.8 2.3 - -IMF (Oct. 2014) 1.4 1.5 - -


-10

-5

0

5

10

2000 2005 2010 2015

SloveniaEastern EuropeWorld

3

6

9

12

2000 2005 2010 2015

SloveniaEastern Europe

-6

-3

0

3

6

Q1 12 Q1 13 Q1 14 Q1 15 Q1 16

SloveniaEastern EuropeWorld

0

1

2

3



0

1

2

3



8

9

10

11


2015 2016

-4.0

-3.5

-3.0

-2.5


2015 2016

-15

-10

-5

0

5

2000 2005 2010 2015

Slovenia

Eastern Europe



April 2015


9 | Inflation | 2000 - 2019 | in %






Notes and sources

General: Long-term chart period from 2000 to 2019 unless otherwise stated. All monetary and external sector data are from the Statistical Office of the Republic of Slovenia (SORS) and the Central Bank of Slovenia (BS, Banka Slovenije). See below for details. Forecasts based on FocusEconomics Consensus Forecast. 9 Inflation, annual average variation of harmonized index of consumer prices (HICP) in %.

Source: SORS.10 Inflation, annual variation of quarterly average harmonized index of consumer prices (HICP)

in %. Source: SORS.11 Inflation, evolution of 2015 forecasts during the last 18 months.12 Inflation, evolution of 2016 forecasts during the last 18 months.13 Current account balance as % of GDP. Source: BS.14 Current account balance as % of GDP, evolution of 2015 and 2016 forecasts during the last

18 months.

-6

-3

0

3

6

2000 2005 2010 2015

Slovenia

Eastern Europe

3

4

5

6


2015 2016

0

5

10

15

20

25

2000 2005 2010 2015


-3

0

3

6

9

12

Q1 12 Q1 13 Q1 14 Q1 15 Q1 16


-1

0

1

2

3



0

1

2

3



Individual Forecasts 2015 2016 2015 2016Capital Economics 0.0 1.0 4.0 3.0Citigroup Global Mkts - - 4.8 4.8DekaBank -0.2 1.2 5.7 5.4EIU 0.8 1.8 3.9 1.8IMAD -0.2 1.0 5.9 6.0Institute EIPF 0.8 1.6 6.1 6.0Kopint-Tárki - - 5.5 5.1Oxford Economics 0.4 2.1 6.6 6.0Raiffeisen Research 0.5 1.2 4.8 4.6UniCredit -0.2 1.1 6.2 6.4WIIW 0.5 0.5 5.3 4.9SummaryMinimum -0.2 0.5 3.9 1.8Maximum 0.8 2.1 6.6 6.4Median 0.4 1.2 5.5 5.1Consensus 0.3 1.3 5.3 4.9History30 days ago 0.5 1.3 5.2 4.860 days ago 0.6 1.3 5.1 4.790 days ago 0.6 1.4 5.0 4.5Additional ForecastsCentral Bank (Apr. 2015) -0.1 1.1 - -Euro. Comm. (Feb. 2015) -0.3 0.9 - -IMF (Oct. 2014) 1.0 1.7 - -

Prices (HICP) Current Accountvariation in % % of GDP



April 2015

Fact Sheet

Slovenia in the Region


Slovenia 1.1%

Russia 45.8%

Turkey 18.2%

Poland 12.4%

Czech Republic

4.6%

Other17.9%

Slovenia 0.6%

Russia 38.8%

Turkey 20.9%

Ukraine 12.2%

Poland 10.4%

Other17.2%

Other EU-27

28.9%

Italy16.5%

Germany16.3%

Austria10.4%

Asia ex-Japan8.8%

Other19.1%

Croatia6.2%

Other EU-27

35.3%

Germany20.0%

Italy12.0%

Austria7.9%

Other18.7%

Other3.3%


Ores & Metals6.0%

Mineral Fuels15.1%

Food8.1%

Other10.6%


Mineral Fuels5.5%

Trade Structure



Economic Structure


Exports

Exports

Imports

Imports

-20

0

20

40

60

80

100

1202003-05 2006-08 2009-11

Net Exports

Investment


PrivateConsumption

0

20

40

60

80

1002002-04 2005-07 2008-10

Agriculture

Manufacturing

Other Industry

Services

General Data


Political Data



• Well educated labor force• High income per capita• Diversified economy

.

• Banking sector under severe distress• Small open economy sensitive to external demand shocks


Agency Rating OutlookMoody’s: Baa3 StableS&P: A- StableFitch Ratings: BBB+ Stable


Transportation (2013) Airports: 16Railways (km): 1,228Roadways (km): 38,985Chief Ports: Koper

Official name: Republic of SloveniaCapital: Ljubljana (0.5m)Other cities: Maribor (0.3m)Area (km2): 20,273Population (million, 2014 est.): 2.1Population density (per km2, 2014): 101.7Population growth rate (%, 2014 est.): -0.2Life expectancy (years, 2014 est.): 77.8Illiteracy rate (%, 2011): 0.3Language: SlovenianMeasures: Metric systemTime: GMT+1

Prime Minister: Miro CerarLast elections: 13 July 2014Next elections: 2018Central Bank President: Boštjan Jazbec

FOCUSECONOMICS Turkey


April 2015

Turkey

REAL SECTOR | Economy accelerates in Q4In Q4, GDP rose 2.6% over the same quarter of the previous year, which was a notable improvement over the 1.9% increase recorded in Q3. The figure marked the fastest increase in three quarters. The reading came in above the 2.0% expansion the market had expected.

The result tallied in Q4 reflected an improvement in domestic demand while the external sector performed worse compared to the previous quarter. Growth in private consumption accelerated from 0.1% in Q3 to 2.4% in Q4. In addition, total investment rebounded from a 4.6% drop observed in the third quarter to a 5.5% increase, thus marking the fastest expansion in a year. Moreover, overall growth benefited from an increase in inventories.

Exports of goods and services expanded 3.4% in Q4, which was below the 7.9% increase tallied in Q3. Conversely, imports expanded 4.6%, which contrasted the 1.6% contracting observed in the previous quarter. As a result, the external sector’s net contribution to overall growth fell from plus 2.4 percentage points in Q3 to minus 0.4 percentage points in Q4.

Turkey’s economy lost steam last year, slowing from 2013’s 4.2% expansion to a 2.9% increase. The result was driven by sluggish private consumption and a contraction in fixed investment. More recent data for 2015 paint a mixed picture of the economy. The manufacturing PMI hit an almost-six-year low in March, yet industrial production rebounded to an expansion in February. On the political front, Turkey’s four major political parties presented their candidate lists to parliament on 7 April for the upcoming June general elections. The ruling Justice and Development party (AKP) has stated that their top electoral priority will be to switch from the current parliamentary system of government to a presidential system and they are hoping to win 367 of the 550 seats in order to change the constitution. President Recep Tayyip Erdogan has been advocating that the switch will promote political stability and more rapid decision making going forward, while critics argue that it will lead to a more authoritarian-style government.

Turkey’s outlook has moderated. While the fall in oil prices should help reduce the country’s current account deficit, growing uncertainty around the upcoming parliamentary elections and expectations that consumer spending will remain soft present a downside risk. FocusEconomics Consensus Forecast panelists lowered their growth projection for 2015 by 0.2 percentage this month and expect the economy to expand 3.4%. For 2016, the panel sees GDP expanding 3.9%.

Inflation remained stable at February’s 7.6% in March. At its 17 March meeting, the Central Bank decided to keep the one-week repo rate unchanged at 7.50%. Panelists expect inflation to end 2015 at 6.8% and 2016 at 6.6%.

Outlook moderates


2011-13 2014-16 2017-19Population (million): 75.1 78.1 80.5GDP (USD bn): 794 790 988GDP per capita (USD): 10,566 10,115 12,258GDP growth (%): 5.0 3.4 4.2Fiscal Balance (% of GDP): -1.6 -1.5 -1.6Public Debt (% of GDP): 37.2 33.4 31.1Inflation (%): 7.6 8.4 7.2Current Account (% of GDP): -7.9 -5.2 -4.8External Debt (% of GDP): 43.3 53.4 48.9

Turkey

Angela Bouzanis Economist


Note: Year-on-year variation of GDP in %.Source: Turkish Statistical Institute (TurkStat) and FocusEconomics Consensus Forecast.

0

5

10

15

Q1 2011 Q1 2012 Q1 2013 Q1 2014 Q1 2015

%



April 2015

A quarter-on-quarter analysis corroborates the acceleration suggested by the annual figures. GDP rose 0.7% over the previous quarter in seasonally- and calendar-day adjusted terms. The reading was up from the 0.5% increase observed in Q3.

The Turkish government expects the economy to expand 4.0% in 2015 and 5.0% in 2016. FocusEconomics Consensus Forecast panelists are less optimistic than the government and see GDP expanding 3.4% this year, which is down 0.2 percentage points from last month’s forecast. For 2016, the panel sees the economy accelerating to a 3.9% increase.

REAL SECTOR | Manufacturing PMI hits almost six-year low in MarchThe HSBC Manufacturing Purchasing Managers’ Index (PMI) inched down from 49.6 in February to 48.0 in March. As a result, the PMI now lies slightly further below the 50-threshold that separates expansion from contraction in manufacturing conditions. In addition, the print marked an almost six-year low.

March’s fall reflected decreases in four of five components of the index. Both new orders and output fell for the third consecutive month. In addition, employment, which had remained a bright spot output, stagnated after 69 consecutive months of growth. Input prices rose to a year high on the back of a weaker lira. HSBC analysts pointed out that, “[t]he March survey results suggest that February’s downturn in the Turkish manufacturing sector was more than just a weather-related blip […] Official industrial production declined 2.2% year-on-year in January, and the PMI Output Index suggests this negative trend will continue over the rest of the quarter.”

REAL SECTOR | Industrial production rebounds to expansionIn February, industrial production expanded a calendar-adjusted 1.0% over the same month last year, which notably contrasted the 2.1% decrease tallied in January (previously reported: -2.2% year-on-year). January’s fall had marked the first decrease since December 2012. In addition, the print contrasted the 0.3% contraction that market analysts had expected. According to the statistical institute, February’s reading reflected an expansion in manufacturing, as well as in electricity, gas and steam. On the other hand, mining and quarrying recorded a contraction over the same month last year, however at a more moderate pace than in January.

A month-on-month comparison corroborates the improvement suggested by the annual figures as industrial production rose 1.7% in seasonally- and calendar-adjusted terms. The reading contrasted the 1.2% decrease tallied in January (previously reported: -1.4% month-on-month). Annual average growth in industrial output fell from January’s 2.8% to 2.5% in February, thus marking a year-and-a-half low.

FocusEconomics Consensus Forecast participants expect industrial production to rise 3.7% in 2015, which is down 0.3 percentage points from last month’s estimate. The panel sees industrial output increasing 4.6% in 2016.

OUTLOOK | Consumer sentiment falls to six-year low in MarchIn March, the consumer confidence index, which is published by the Statistical Institute in cooperation with the Central Bank, fell from February’s 68.1 points to 64.4 points. The result marked the lowest level in six years. As a result, consumer confidence is further from the 100-point threshold that separates pessimistic from optimistic territory.


Note: Year-on-year and annual average variation of industrial production index in %.Source: Turkish Statistical Institute (TurkStat) and FocusEconomics calculations.

-3.0

0.0

3.0

6.0

9.0


Year-on-year

Annual average

%


Note: HSBC Turkey Purchasing Managers’ Index (PMI). A reading above 50 indicates an expansion in business activity while a value below 50points to a contraction. Source: HSBC and Markit.

46

48

50

52

54

56




April 2015

March’s decrease was a result of a broad-based deterioration. Consumers were more pessimistic regarding their financial and economic situation in the next 12 months. In addition, consumers were more worried about unemployment compared to the previous month.

FocusEconomics Consensus Forecast panelists see private consumption expanding 2.8% in 2015, which is down 0.1 percentage points from last month’s forecast. For 2016, the panel expects private consumption to grow 3.5%.

OUTLOOK | Business confidence ticks up in March The Real Sector Confidence Index published by the Central Bank rose from 103.4 in February to 103.5 in March, which marked a five-month high. As a result, business confidence remains above the 100-point threshold, which indicates an optimistic outlook for business conditions.

March’s result showed that businesses were more optimistic regarding the volume of output, total employment, as well as export orders for the following three months. Conversely, firms were less optimistic regarding the general business situation.

FocusEconomics Consensus Forecast panelists see fixed investment experiencing a 2.6% expansion in 2015, which is up 0.1 percentage points compared to last month’s estimate. In 2016, panelists expect investment growth to accelerate to 4.5%.

MONETARY SECTOR | Inflation stable in March In March, consumer prices rose 1.19% over the previous month, which was above February’s 0.71% increase. According to the statistical office, higher prices were recorded for food and non-alcoholic beverages, as well as for hotels, cafes and restaurants. In contrast, lower prices were observed for communications.

Inflation remained unchanged at February’s 7.6% in March. March’s result overshot market expectations of 7.3% inflation.

The core inflation index, which excludes more volatile categories such as unprocessed food and energy, increased 0.58% in March (February: +0.01% month-on-month). Annual core inflation inched down from 8.1% in February to 7.4% in March.

The Central Bank of Turkey (CBRT) sees year-end inflation at 5.5% in 2015 and 5.0% in 2016. FocusEconomics panelists expect inflation to close 2015 at 6.8%, which is up 0.2 percentage points from last month’s forecast. For 2016, the panel sees inflation moderating to 6.6% by year-end.

MONETARY SECTOR | Central Bank maintains key ratesAt its 17 March monetary policy meeting, the Central Bank (CBRT) decided to keep the one-week repo rate unchanged at 7.50%. The decision was in line with market expectations. In addition, the Bank decided to maintain the borrowing rate at 7.25%, the marginal funding rate at 10.75%, and the interest rate on borrowing facilities provided for primary dealers at 10.25%.

Similar to the previous statement, the CBRT pointed out that loan growth remains at reasonable levels against a backdrop of tight monetary policy and macroprudential measures. The Bank stated that although external demand is


Note: Year-on-year and month-on-month variation of consumer price index in %.Source: Turkish Statistical Institute (TurkStat).

6.0

7.0

8.0

9.0

10.0

-1.0

0.0

1.0

2.0

3.0




%%

95

100

105

110

115

120


Business Confidence Index

Note: Real Sector Confidence Index. Values above 100 indicate an optimistic outlook while values below 100 indicate a pessimistic outlook.Source: Central Bank of the Republic of Turkey (CBRT).

Consumer Confidence Index

Note: Consumer Confidence Index. Values above 100 indicate an optimistic outlook while values below 100 indicate a pessimistic outlook.Source: Turkish Statistical Institute (TurkStat).

60

70

80

90

100




April 2015

still weak, domestic demand is contributing to growth. Regarding the external sector, the Bank restated that favorable terms of trade and the moderate path of consumer loans will continue to contribute to rebalancing the current account.

Regarding consumer price developments, the Central Bank underscored that the current monetary policy stance and macroprudential policies are having a desirable effect on inflationary pressures. However, elevated food prices and global uncertainty reaffirm a cautious monetary policy stance. Against this backdrop, the CBRT decided to keep interest rates unchanged.

Looking forward, the Bank commented that, “future monetary policy decisions will be conditional on the improvements in the inflation outlook.” Moreover, the Bank reaffirmed its tight monetary policy stance by, “keeping a flat yield curve, until there is a significant improvement in the inflation outlook.” The next monetary policy meeting is scheduled for 22 April.

The decision comes amid a backdrop of heightened tensions between the Central Bank and the government. President Recep Tayyip Erdogan has been publicly criticizing the Central Bank for not cutting rates as oil prices are in freefall. This situation caused concerns to resurface regarding the independence of the Central Bank.

FocusEconomics Consensus Forecast panelists see the one-week repo rate ending the year at 7.24%. For 2016, the panel expects the rate to rise to 7.47%. Meanwhile, FocusEconomics Consensus Forecast panelists see the marginal funding rate ending the year at 11.30%. For 2016, the panel expects the rate to remain broadly stable at 10.94%.

EXTERNAL SECTOR | Current account deficit narrows in FebruaryThe current account balance recorded a USD 3.2 billion deficit in February (January: USD 2.0 billion deficit), which marked an improvement over the USD 3.3 billion shortfall recorded in the same month last year. The print was below market expectations of a USD 2.8 billion deficit. The 12-month trailing current account deficit narrowed from USD 43.0 billion in January to USD 42.8 billion in February (roughly equivalent to 5.8% of GDP).

In February, exports fell 6.0% in USD terms over the same month last year, which contrasted the 0.5% increase tallied in January. Imports fell 7.1%, which followed January’s 13.9% annual contraction. As a result, the trade deficit came in at USD 3.1 billion in February, which marked an improvement over the USD 3.5 billion shortfall recorded in the same month last year.

FocusEconomics Consensus Forecast panelists expect the current account deficit to reach 4.7% of GDP this year. For 2016, the panel sees the current account deficit increasing to 5.1% of GDP.

Current Account Balance | USD billion

Note: Monthly and 12-month sum of current account balance in USD billion.Source: Central Bank of the Republic of Turkey (CBRT).

-80

-70

-60

-50

-40

-12.0

-9.0

-6.0

-3.0

0.0


Monthly current account balance (left scale)

12-m current account balance (right scale)

Monetary Policy Rates | in %

Note: 1-week repo rate, overnight borrowing rate and marginal funding rate in %. Source: Central Bank of the Republic of Turkey (CBRT).

0.0

3.0

6.0

9.0

12.0

15.0

May-10 Nov-10 May-11 Nov-11 May-12 Nov-12 May-13 Nov-13 May-14 Nov-14

1-week repo rateOvernight borrowing rateOvernight lending rate

%



April 2015


Annual Data 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019Real Sector Population (million) 73.0 74.0 74.9 76.5 77.3 78.2 79.0 79.8 80.6 81.3GDP per capita (USD) 9,983 10,437 10,509 10,752 10,342 9,601 10,402 11,262 12,261 13,251GDP (USD bn) 729 772 787 822 800 750 821 898 988 1,078GDP per capita (EUR) 7,660 7,471 8,295 8,195 7,837 9,002 9,847 10,246 10,660 11,152GDP (EUR bn) 559 553 621 627 606 704 778 817 859 907GDP (TRY bn) 1,099 1,298 1,417 1,567 1,750 1,944 2,186 2,432 2,722 3,017Economic Growth (Nominal GDP, ann. var. in %) 15.3 18.1 9.2 10.6 11.6 11.1 12.4 11.2 11.9 10.8Economic Growth (GDP, annual var. in %) 9.2 8.8 2.1 4.2 2.9 3.4 3.9 4.1 4.2 4.2Domestic Demand (annual var. in %) 13.5 9.5 -1.8 6.7 1.0 3.1 3.7 4.1 4.2 4.2Private Consumption (annual var. in %) 6.7 7.7 -0.5 5.1 1.3 2.8 3.5 3.3 3.4 3.4Government Consumption (ann. var. in %) 2.0 4.7 6.2 6.5 4.6 - - - - -Fixed Investment (annual var. in %) 30.5 18.0 -2.7 4.4 -1.3 2.6 4.5 4.6 4.5 4.4Industrial Production (annual var. in %) 12.4 9.6 2.4 3.5 3.5 3.7 4.6 4.6 4.5 4.4Unemployment (% of active population, aop) 11.2 9.2 8.4 9.1 10.0 10.1 9.9 9.6 9.0 8.9Fiscal Balance (% of GDP) -3.6 -1.4 -2.1 -1.2 -1.3 -1.7 -1.7 -1.7 -1.6 -1.5Public Debt (% of GDP) 42.3 39.1 36.2 36.3 33.5 33.9 32.8 31.9 30.7 30.5Monetary and Financial Sector Money (annual variation of M2 in %) 19.0 11.5 12.9 22.8 11.2 - - - - -Inflation (CPI, annual variation in %, eop) 6.4 10.5 6.2 7.4 8.2 6.8 6.6 6.0 5.9 5.7Inflation (Core, annual variation in %, eop) 5.3 9.8 6.0 7.1 9.4 - - - - -Inflation (PPI, annual variation in %, eop) 8.5 11.1 6.2 4.5 10.3 - - - - -1-Week Repo Rate (%, eop) 6.50 5.75 5.50 4.50 8.25 7.24 7.47 8.00 8.43 8.50Marginal Funding rate (%, eop) 9.00 12.50 9.00 7.75 11.25 11.30 10.94 11.25 11.65 12.0010-year Bond Yield (%, eop) 8.6 10.0 6.6 10.3 8.1 8.8 8.5 8.1 7.2 6.5Stock Market (variation of BIST in %) 25.0 -22.3 52.6 -13.3 26.4 - - - - -Exchange Rate (TRY per USD, eop) 1.54 1.89 1.78 2.15 2.33 2.68 2.69 2.73 2.79 2.81Exchange Rate (TRY per USD, aop) 1.51 1.68 1.80 1.91 2.19 2.59 2.66 2.71 2.76 2.80Exchange Rate (TRY per EUR, eop) 2.06 2.44 2.35 2.95 2.82 2.78 2.87 3.08 3.26 3.39Exchange Rate (TRY per EUR, aop) 2.00 2.34 2.31 2.53 2.90 2.76 2.81 2.98 3.17 3.33External Sector Current Account Balance (% of GDP) -6.2 -9.7 -6.2 -7.9 -5.7 -4.7 -5.1 -5.0 -4.8 -4.7Current Account Balance (USD bn) -45.3 -75.0 -48.5 -64.7 -46.0 -35.0 -41.7 -44.8 -47.6 -50.7Merchandise Trade Balance (USD bn) -56.3 -89.2 -65.4 -79.9 -63.6 -53.4 -61.0 -64.0 -66.7 -68.1Merchandise Exports (USD bn) 121.0 142.4 162.0 161.8 168.9 172.6 182.7 198.1 215.4 234.5Merchandise Imports (USD bn) 177.3 232.7 228.8 243.6 234.8 226.1 243.7 262.2 282.1 302.6Merchandise Exports (annual variation in %) 10.3 17.7 13.7 -0.1 4.4 2.2 5.8 8.5 8.7 8.9Merchandise Imports (annual variation in %) 31.8 31.2 -1.7 6.5 -3.6 -3.7 7.8 7.6 7.6 7.3International Reserves (USD bn) 80.7 78.5 99.9 110.9 106.9 111.3 117.5 123.7 128.1 132.2International Reserves (months of imports) 5.5 4.0 5.2 5.5 5.5 5.9 5.8 5.7 5.5 5.2External Debt (USD bn) 292 304 339 389 402 422 441 457 483 504External Debt (% of GDP) 40.1 39.4 43.1 47.3 50.3 56.3 53.7 50.9 48.9 46.8

Quarterly Data Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16Economic Growth (GDP, annual var. in %) 1.9 2.6 2.6 3.2 3.6 3.8 3.8 3.9 4.0 4.0Economic Growth (GDP, qoq variation in %) 0.5 0.7 - - - - - - - -Inflation (CPI, annual variation in %, eop) 8.9 8.2 7.6 7.8 7.4 6.8 6.6 6.6 6.6 6.61-Week Repo Rate (%, eop) 8.25 8.25 7.50 7.48 7.48 7.24 7.38 7.43 7.46 7.47Marginal Funding rate (%, eop) 11.25 11.25 10.75 10.70 11.16 11.30 11.25 11.15 11.08 10.94Exchange Rate (TRY per USD, eop) 2.28 2.33 2.60 2.62 2.64 2.68 2.64 2.66 2.67 2.69Exchange Rate (TRY per EUR, eop) 2.88 2.82 2.79 2.76 2.74 2.78 2.77 2.81 2.84 2.87

Monthly Data Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15Industrial Production (annual variation in %) 1.5 3.3 4.7 2.6 2.3 0.6 2.5 -2.1 1.0 -Unemployment (% of active population) 9.1 9.8 10.1 10.5 10.4 10.7 10.9 - - -Consum. Confid. Index (100-point threshold) 73.7 73.9 73.2 74.0 70.3 68.7 67.7 67.7 68.1 64.4Business Confid. Index (100-point threshold) 110.7 109.0 106.8 107.6 106.9 102.7 101.2 103.2 103.4 103.5HSBC Manufacturing PMI (50-threshold) 48.8 48.5 50.3 50.4 51.5 52.2 51.4 49.8 49.6 48.0Capacity Utilization (in %) 75.3 74.9 74.7 74.4 74.9 74.5 74.6 73.7 72.8 72.4Inflation (CPI, mom variation in %) 0.31 0.45 0.09 0.14 1.90 0.18 -0.44 1.10 0.71 1.19Inflation (CPI, annual variation in %) 9.2 9.3 9.5 8.9 9.0 9.2 8.2 7.2 7.6 7.6Exchange Rate (TRY per USD, eop) 2.12 2.14 2.16 2.28 2.22 2.22 2.33 2.45 2.51 2.60Exchange Rate (TRY per EUR, eop) 2.90 2.87 2.84 2.88 2.79 2.76 2.82 2.76 2.81 2.79Current Account Balance (USD bn) -4.1 -2.3 -2.2 -2.3 -2.3 -5.8 -6.8 -2.0 -3.2 -



April 2015

0%

20%

40%

60%

< 2.3 2.7 3.1 3.5 3.9 4.3 4.7 5.1 > 5.1


1 | Real GDP | 2000 - 2019 | var. in %




Notes and sources

Long-term chart period from 2000 to 2019 unless otherwise stated. All real sector data are from the Turkish Statistical Institute (TurkStat). Forecasts based on FocusEconomics Consensus Forecast.1 GDP, real annual variation in %. 2 Quarterly GDP (not seasonally adjusted), year-on-year variation in %.3 GDP, evolution of 2015 forecasts during the last 18 months.4 GDP, evolution of 2016 forecasts during the last 18 months.5 GDP, panelist distribution of 2015 forecasts. Concentration of panelists in forecast interval in


Individual Forecasts 2015 2016Berenberg 3.6 3.8BofA Merrill Lynch 3.2 4.0Capital Economics 2.8 3.0Citigroup Global Mkts 2.5 3.4Credit Agricole 3.5 3.8Credit Suisse 3.3 3.0Danske Bank 3.2 3.6DekaBank 3.7 4.1Deutsche Bank 3.5 3.7EIU 4.0 4.5Erste Bank 3.0 3.5Finansbank 4.0 4.5Frontier Strategy Group 3.1 3.7Garanti Bank 3.7 4.5Goldman Sachs 4.0 3.0HSBC 3.0 3.0ING 3.9 4.0Isbank 3.5 4.0JPMorgan 3.1 4.0KBC 3.2 3.7National Bank of Greece 3.4 4.0Nomura 3.4 3.5Oxford Economics 3.3 5.2Raiffeisen Research 3.5 3.5Sberbank 3.5 3.7Scotiabank 3.2 3.9Seker Invest 3.0 5.0Standard Chartered 3.5 4.5UBS 3.7 3.8UniCredit 3.2 3.6SummaryMinimum 2.5 3.0Maximum 4.0 5.2Median 3.4 3.8Consensus 3.4 3.9History30 days ago 3.6 3.960 days ago 3.5 3.990 days ago 3.4 3.8Additional ForecastsIMF (Oct. 2014) 3.0 3.7European Commission (Feb. 2015) 3.7 4.0Government (Mar. 2015) 4.0 5.0

-10

-5

0

5

10

2000 2005 2010 2015

TurkeyEastern EuropeWorld

-2

0

2

4

6

Q1 12 Q1 13 Q1 14 Q1 15 Q1 16

TurkeyEastern EuropeWorld

2

3

4

5

6



1

2

3

4

5

6






April 2015



2

4

6

8


2015 2016


-40

-20

0

20

40

2000 2005 2010 2015

Turkey

Eastern Europe


2

3

4

5


2015 2016


-10

-5

0

5

10

15

2000 2005 2010 2015


Individual Forecasts 2015 2016 2015 2016Berenberg - - - -BofA Merrill Lynch 2.3 3.0 - -Capital Economics 2.0 3.0 2.0 4.0Citigroup Global Mkts 1.2 3.5 1.8 2.4Credit Agricole - - - -Credit Suisse 2.5 2.5 2.0 2.0Danske Bank 3.3 3.4 2.2 3.4DekaBank - - - -Deutsche Bank 3.1 3.7 2.5 5.1EIU 2.5 2.9 4.0 6.0Erste Bank - - - -Finansbank - - - -Frontier Strategy Group 2.7 3.3 - -Garanti Bank - - - -Goldman Sachs - - - -HSBC 2.8 3.1 1.4 5.9ING - - - -Isbank - - - -JPMorgan - - - -KBC - - - -National Bank of Greece - - - -Nomura - - - -Oxford Economics 3.6 6.0 3.3 6.9Raiffeisen Research 2.6 - 3.0 -Sberbank - - - -Scotiabank - - - -Seker Invest - - - -Standard Chartered - - - -UBS 3.5 3.5 2.5 6.0UniCredit 4.2 3.6 3.6 3.0SummaryMinimum 1.2 2.5 1.4 2.0Maximum 4.2 6.0 4.0 6.9Median 2.7 3.4 2.5 4.6Consensus 2.8 3.5 2.6 4.5History30 days ago 2.9 3.3 2.5 4.360 days ago 2.8 3.3 2.9 4.590 days ago 2.6 3.4 3.2 4.9


Notes and sources

Long-term chart period from 2000 to 2019 unless otherwise stated. All real sector data are from the Turkish Statistical Institute (TurkStat). Forecasts are based on FocusEconomics Consensus Forecast.6 Private consumption, annual variation in %. 7 Private consumption, evolution of 2015 and 2016 forecasts during the last 18 months.8 Gross fixed investment, annual variation in %.9 Gross fixed investment, evolution of 2015 and 2016 forecasts during the last 18 months.




April 2015


Individual Forecasts 2015 2016 2015 2016Berenberg - - 9.4 9.3BofA Merrill Lynch - - 10.2 10.0Capital Economics 4.0 5.0 11.5 11.0Citigroup Global Mkts - - 10.8 10.9Credit Agricole - - - -Credit Suisse - - 10.2 10.3Danske Bank - - 9.5 9.5DekaBank - - - -Deutsche Bank 3.8 4.1 9.8 9.6EIU 3.9 4.2 9.8 9.5Erste Bank - - 9.3 9.4Finansbank - - - -Frontier Strategy Group 4.0 4.2 11.0 10.5Garanti Bank - - - -Goldman Sachs - - - -HSBC 4.2 4.5 10.5 10.5ING - - 9.7 9.5Isbank - - - -JPMorgan - - - -KBC - - - -National Bank of Greece - - 10.0 10.5Nomura - - - -Oxford Economics 3.3 7.1 9.6 9.0Raiffeisen Research 3.0 3.5 9.5 9.2Sberbank - - - -Scotiabank - - - -Seker Invest 2.5 3.5 11.0 10.0Standard Chartered - - - -UBS 4.5 5.0 9.7 9.5UniCredit - - - -SummaryMinimum 2.5 3.5 9.3 9.0Maximum 4.5 7.1 11.5 11.0Median 3.9 4.2 9.8 9.6Consensus 3.7 4.6 10.1 9.9History30 days ago 4.0 4.6 10.0 9.860 days ago 4.2 4.8 9.7 9.590 days ago 4.2 4.7 9.6 9.4


Notes and sources

Long-term chart period from 2000 to 2019 unless otherwise stated. All real sector data are from the Turkish Statistical Institute (TurkStat). Forecasts are based on FocusEconomics Consensus Forecast.10 Industrial production, annual variation in %.11 Industrial production, evolution of 2015 and 2016 forecasts during the last 18 months.12 Unemployment, % of active population.13 Unemployment, evolution of 2015 and 2016 forecasts during the last 18 months.

Industrial Production and Unemployment 10 | Industry | variation in %

-20

-10

0

10

20

2000 2005 2010 2015



3

4

5

6

7


2015 2016


6

8

10

12

14

2000 2005 2010 2015



8.0

8.5

9.0

9.5

10.0

10.5


2015 2016



April 2015


32

33

34

35


2015 2016


20

40

60

80

2000 2005 2010 2015



-15

-10

-5

0

5

2000 2005 2010 2015

Turkey

Eastern Europe


-2.5

-2.3

-2.1

-1.9

-1.7

-1.5


2015 2016



Individual Forecasts 2015 2016 2015 2016Berenberg -2.0 -1.8 - -BofA Merrill Lynch -1.5 -1.7 33.7 31.2Capital Economics -2.0 -2.0 - -Citigroup Global Mkts -1.3 -2.9 35.5 35.1Credit Agricole - - - -Credit Suisse -1.6 -1.8 32.6 30.8Danske Bank - - - -DekaBank -1.6 -1.4 - -Deutsche Bank -2.0 -1.6 35.9 34.7EIU -1.7 -1.6 33.0 31.8Erste Bank -1.6 -1.4 34.3 32.6Finansbank -1.3 -1.1 33.1 31.8Frontier Strategy Group - - - -Garanti Bank - - - -Goldman Sachs - - - -HSBC -1.6 -1.2 33.0 32.0ING -1.8 -1.6 33.6 32.4Isbank - - - -JPMorgan -1.3 -1.2 - -KBC - - - -National Bank of Greece -1.1 -1.2 33.5 33.0Nomura -1.5 -1.8 33.5 32.5Oxford Economics -1.3 -1.0 - -Raiffeisen Research -1.5 -1.5 35.0 34.0Sberbank - - - -Scotiabank - - - -Seker Invest -2.5 -2.5 - -Standard Chartered - - - -UBS -1.5 -1.2 34.5 33.5UniCredit -2.5 -3.0 33.4 33.3SummaryMinimum -2.5 -3.0 32.6 30.8Maximum -1.1 -1.0 35.9 35.1Median -1.6 -1.6 33.5 32.6Consensus -1.7 -1.7 33.9 32.8History30 days ago -1.7 -1.6 33.8 32.660 days ago -1.7 -1.6 33.7 32.490 days ago -1.9 -1.7 33.2 32.2


Notes and sources

Long-term chart period from 2000 to 2019 unless otherwise stated. All real sector data are from the Ministry of Finance. Forecasts based on FocusEconomics Consensus Forecast.14 Central government balance as % of GDP.15 Central government balance as % of GDP, evolution of 2015 and 2016 forecasts during the last 18 months. 16 Public debt as % of GDP. 17 Public debt as % of GDP, evolution of 2015 and 2016 forecasts during the last 18 months.



April 2015

0%

20%

40%

60%

< 5.0 5.5 6.0 6.5 7.0 7.5 8.0 8.5 > 8.5


18 | Inflation | 2000 - 2019 | in %


19 | Inflation | Q1 12-Q4 16 | in %


Notes and sources

Long-term chart period from 2000 to 2019 unless otherwise stated. All monetary sector data are from the Turkish Statistical Institute (TurkStat). Forecasts are based on FocusEconomics Consensus Forecast.18 Inflation, annual variation of consumer price index (CPI) in % (eop).19 Quarterly inflation, annual variation of consumer price index (CPI) in % (eop).20 Inflation, evolution of 2015 forecasts during the last 18 months.21 Inflation, evolution of 2016 forecasts during the last 18 months.22 Inflation, panelist distribution of 2015 forecasts. Concentration of panelists in forecast interval


Individual Forecasts 2015 2016Berenberg 6.8 6.5BofA Merrill Lynch 6.8 7.0Capital Economics 6.3 7.3Citigroup Global Mkts 7.0 6.3Credit Agricole 7.2 8.0Credit Suisse 6.7 6.8Danske Bank - -DekaBank 6.7 6.2Deutsche Bank 7.4 7.5EIU 6.7 5.8Erste Bank - -Finansbank 6.8 6.5Frontier Strategy Group 6.7 6.5Garanti Bank 6.1 6.5Goldman Sachs - -HSBC 7.1 6.7ING 6.4 6.3Isbank 6.8 6.3JPMorgan 6.5 5.8KBC 7.2 6.5National Bank of Greece 6.5 6.0Nomura 6.7 6.2Oxford Economics - -Raiffeisen Research 7.2 6.5Sberbank 6.9 5.5Scotiabank 6.5 5.9Seker Invest 6.8 7.0Standard Chartered 6.8 7.0UBS - -UniCredit 6.7 7.3SummaryMinimum 6.1 5.5Maximum 7.4 8.0Median 6.8 6.5Consensus 6.8 6.6History30 days ago 6.6 6.460 days ago 6.6 6.490 days ago 6.9 6.5Additional ForecastsIMF (Oct. 2014) 7.1 6.2Central Bank (Jan. 2015) 5.5 5.0



4

6

8

10



0

20

40

60

80

2000 2005 2010 2015


4

6

8

10



3

6

9

12

Q1 12 Q1 13 Q1 14 Q1 15 Q1 16




April 2015

0%

10%

20%

30%

40%

< 5.50 6.00 6.50 7.00 7.50 8.00 8.50 9.00 > 9.00


23 | Interest Rate | 2000 - 2019 | in %




Notes and sources

Long-term chart period from 2000 to 2019 unless otherwise stated. All monetary sector data are from the Central Bank of the Republic of Turkey (CBRT). Forecasts are based on FocusEconomics Consensus Forecast.23 Interest rate, Central Bank 1-Week Repo Rate in % (eop).24 Quarterly interest rate, Central Bank 1-Week Repo Rate in % (eop).25 Interest rate, evolution of 2015 forecasts during the last 18 months.26 Interest rate, evolution of 2016 forecasts during the last 18 months.27 Interest rate, panelist distribution of 2015 forecasts. Concentration of panelists in forecast


Individual Forecasts 2015 2016Berenberg - -BofA Merrill Lynch 6.50 8.00Capital Economics 7.00 7.00Citigroup Global Mkts 8.25 9.00Credit Agricole 8.00 8.25Credit Suisse 6.75 6.75Danske Bank 7.25 -DekaBank - -Deutsche Bank 8.00 -EIU - -Erste Bank - -Finansbank - -Frontier Strategy Group - -Garanti Bank 7.50 7.00Goldman Sachs 6.00 8.00HSBC 7.00 7.50ING 7.00 7.00Isbank - -JPMorgan 7.50 7.50KBC 8.25 -National Bank of Greece 8.00 7.00Nomura 7.00 7.00Oxford Economics - -Raiffeisen Research 7.00 7.50Sberbank - -Scotiabank - -Seker Invest - -Standard Chartered - -UBS 7.00 7.00UniCredit 6.25 7.50SummaryMinimum 6.00 6.75Maximum 8.25 9.00Median 7.00 7.50Consensus 7.24 7.47History30 days ago 7.36 7.4860 days ago 7.53 7.9390 days ago 8.03 8.40


Interest Rate | 1-Week Repurchase Rate

4

6

8

10

12

14



0

30

60

90

2000 2005 2010 2015


4

6

8

10

12

14



4

6

8

10

12

Q1 12 Q1 13 Q1 14 Q1 15 Q1 16




April 2015

0%

20%

40%

60%

< 2.00 2.20 2.40 2.60 2.80 3.00 3.20 3.40 > 3.40


28 | Exchange Rate | TRY per USD

30 | TRY per USD 2015 | evol. of fcst

29 | Exchange Rate | TRY per USD

31 | TRY per USD 2016 | evol. of fcst

Notes and sources

Long-term chart period from 2000 to 2019 unless otherwise stated. All monetary sector data are from Thomson Reuters. Forecasts based on FocusEconomics Consensus Forecast.28 Exchange rate, TRY per USD (eop).29 Quarterly exchange rate, TRY per USD (eop).30 Exchange rate, evolution of 2015 forecast during the last 18 months.31 Exchange rate, evolution of 2016 forecast during the last 18 months.32 Exchange rate, panelist distribution of 2015 forecasts. Concentration of panelists in forecast


Individual Forecasts 2015 2016Berenberg - -BofA Merrill Lynch 2.50 2.50Capital Economics 2.65 2.70Citigroup Global Mkts 2.80 2.84Credit Agricole 2.58 2.60Credit Suisse 2.67 2.77Danske Bank 2.75 -DekaBank - -Deutsche Bank 2.62 2.77EIU 2.70 2.71Erste Bank - -Finansbank - -Frontier Strategy Group - -Garanti Bank - -Goldman Sachs 2.95 2.70HSBC 2.70 2.70ING 2.60 2.70Isbank - -JPMorgan 2.70 2.60KBC 2.91 -National Bank of Greece - -Nomura 2.70 2.70Oxford Economics 2.62 2.67Raiffeisen Research 2.65 2.75Sberbank - -Scotiabank 2.60 2.55Seker Invest 2.82 2.92Standard Chartered 2.55 -UBS 2.45 2.50UniCredit 2.67 2.70SummaryMinimum 2.45 2.50Maximum 2.95 2.92Median 2.67 2.70Consensus 2.68 2.69History30 days ago 2.55 2.6060 days ago 2.39 2.4590 days ago 2.36 2.39

32 | TRY per USD 2015 | Panelist Distribution

Exchange Rate | TRY per USD

1.5

2.0

2.5

3.0



0.5

1.0

1.5

2.0

2.5

3.0

2000 2005 2010 2015

1.5

2.0

2.5

3.0



1.6

1.9

2.2

2.5

2.8

Q1 12 Q1 13 Q1 14 Q1 15 Q1 16



April 2015


-100

-90

-80

-70

-60

-50


2015 2016


-200

0

200

400

2000 2005 2010 2015



-12

-9

-6

-3

0

3

2000 2005 2010 2015



-7.0

-6.5

-6.0

-5.5

-5.0

-4.5


2015 2016



Individual Forecasts 2015 2016 2015 2016Berenberg - - - -BofA Merrill Lynch -4.3 -4.6 -62.1 -70.2Capital Economics -4.8 -4.8 - -Citigroup Global Mkts -4.1 -4.3 -62.5 -64.1Credit Agricole -5.0 -5.6 - -Credit Suisse -4.3 -4.8 -53.1 -58.0Danske Bank -5.0 -5.5 - -DekaBank -4.1 -4.2 - -Deutsche Bank -4.9 -5.5 -53.0 -61.3EIU -4.5 -5.3 -53.0 -64.0Erste Bank -4.8 -5.7 - -Finansbank -5.6 -5.5 - -Frontier Strategy Group - - - -Garanti Bank -4.5 -4.9 - -Goldman Sachs -4.5 -4.6 - -HSBC -4.5 -4.8 -50.2 -60.0ING -4.4 -5.5 -51.9 -62.8Isbank -5.1 -4.9 - -JPMorgan -4.4 -4.7 - -KBC - - - -National Bank of Greece -4.6 -5.0 -58.3 -65.4Nomura -5.1 -6.0 - -Oxford Economics -3.6 -4.0 -41.4 -47.9Raiffeisen Research -4.7 -5.7 -48.9 -56.3Sberbank - - - -Scotiabank -4.7 -4.9 - -Seker Invest -4.8 -4.5 - -Standard Chartered -5.2 -6.5 - -UBS -4.7 -5.2 - -UniCredit -5.1 -5.2 - -SummaryMinimum -5.6 -6.5 -62.5 -70.2Maximum -3.6 -4.0 -41.4 -47.9Median -4.7 -5.0 -53.0 -62.1Consensus -4.7 -5.1 -53.4 -61.0History30 days ago -4.6 -5.0 -55.1 -60.360 days ago -4.8 -5.1 -62.0 -66.790 days ago -5.1 -5.4 -68.6 -71.4


Notes and sources

Long-term chart period from 2000 to 2019 unless otherwise stated. All external sector data are from the Central Bank of the Republic of Turkey (CBRT). Forecasts based on FocusEconomics Consensus Forecast.33 Current account balance, as % of GDP. 34 Current account balance, evolution of 2015 and 2016 forecasts during the last 18 months.35 Trade balance, exports and imports, in USD. 36 Trade balance, evolution of 2015 and 2016 forecasts during the last 18 months.



April 2015


Exports and Imports

Individual Forecasts 2015 2016 2015 2016Berenberg - - - -BofA Merrill Lynch 175 185 237 255Capital Economics - - - -Citigroup Global Mkts 177 184 239 249Credit Agricole - - - -Credit Suisse 162 166 215 224Danske Bank - - - -DekaBank - - - -Deutsche Bank 171 182 224 244EIU 172 188 225 252Erste Bank - - - -Finansbank - - - -Frontier Strategy Group - - - -Garanti Bank - - - -Goldman Sachs - - - -HSBC 180 192 230 252ING 181 195 233 258Isbank - - - -JPMorgan - - - -KBC - - - -National Bank of Greece 178 185 236 250Nomura - - - -Oxford Economics 171 188 213 236Raiffeisen Research 160 160 209 216Sberbank - - - -Scotiabank - - - -Seker Invest - - - -Standard Chartered - - - -UBS - - - -UniCredit - - - -SummaryMinimum 160 160 209 216Maximum 181 195 239 258Median 173 185 228 249Consensus 173 183 226 244History30 days ago 171 184 226 24460 days ago 172 186 234 25290 days ago 177 191 246 263


Notes and sources

Long-term chart period from 2000 to 2019 unless otherwise stated. All external sector data are from the Central Bank of the Republic of Turkey (CBRT). Forecasts based on FocusEconomics Consensus Forecast.37 Exports, annual variation in %. 38 Exports, evolution of 2015 and 2016 forecasts during the last 18 months.39 Imports, annual variation in %. 40 Imports, evolution of 2015 and 2016 forecasts during the last 18 months.

210

240

270

300

330


2015 2016


-40

-20

0

20

40

60

2000 2005 2010 2015



-40

-20

0

20

40

2000 2005 2010 2015



170

185

200

215

230


2015 2016




April 2015


400

420

440

460


2015 2016


35

45

55

65

2000 2005 2010 2015

Turkey

Eastern Europe


3

6

9

12

2000 2005 2010 2015



105

110

115

120

125


2015 2016



Individual Forecasts 2015 2016 2015 2016Berenberg - - - -BofA Merrill Lynch 119 128 439 473Capital Economics - - - -Citigroup Global Mkts 110 117 430 453Credit Agricole - - - -Credit Suisse 111 118 423 436Danske Bank - - - -DekaBank - - - -Deutsche Bank 108 112 430 455EIU 110 109 381 387Erste Bank - - - -Finansbank - - - -Frontier Strategy Group - - - -Garanti Bank - - - -Goldman Sachs - - - -HSBC 103 116 405 435ING 115 123 406 417Isbank - - - -JPMorgan - - - -KBC - - - -National Bank of Greece 112 113 440 472Nomura - - - -Oxford Economics 114 121 456 490Raiffeisen Research - - 411 393Sberbank - - - -Scotiabank - - - -Seker Invest - - - -Standard Chartered - - - -UBS - - - -UniCredit - - - -SummaryMinimum 103 109 381 387Maximum 119 128 456 490Median 111 117 427 445Consensus 111 117 422 441History30 days ago 112 118 426 44560 days ago 115 121 427 45190 days ago 116 123 425 437


Notes and sources

Long-term chart period from 2000 to 2019 unless otherwise stated. All external sector data are from the Central Bank of the Republic of Turkey (CBRT) and the Turkish Treasury. See below for details. Forecasts based on FocusEconomics Consensus Forecast.41 International reserves, months of imports. Source: CBRT.42 International reserves, evolution of 2015 and 2016 forecasts during the last 18 months.43 External debt as % of GDP. Source: Turkish Treasury.44 External debt, evolution of 2015 and 2016 forecasts during the last 18 months.



April 2015

Turkey in the Region


Fact Sheet

Turkey 18.1%

Russia 45.9%

Poland 12.4%

Czech Republic

4.7%

Romania 4.5%

Other14.4%

Turkey 20.9%

Russia 38.8%

Ukraine 12.2%

Poland 10.4%

Romania 5.4%

Other12.3%

Russia11.3%

U.S.A.6.0%

Other EU-27

22.4%

Germany9.0%

Italy5.6%

Other Asia ex-Japan

7.8%

China9.0%

Other28.9%

Other EU-27

24.7%

Germany8.6%

U.K.5.7%

Other61.0%

Other20.4%


Ores & Metals8.3%

Mineral Fuels10.7%

Other

10.9%


Food10.7%

Trade Structure



Economic Structure


Exports

Exports

Imports

Imports

General Data


Political Data



• Large external imbalances

• Large domestic market• Sound economic policy • High structural unemployment

• Customs union with EU benefits external sector • Persistent geopolitical

tensions

Energy (2012)Primary Energy Production (trillion Btu): 1,381Primary Energy Consumption (trillion Btu): 5,054Electricity Generation (billion kW-h): 228Electricity Consumption (billion kW-h): 197Oil Supply (thousand bpd): 56.7Oil Consumption (thousand bpd): 689CO2 Emmissions (million metric tons): 297

Agency Rating OutlookMoody’s: Baa3 NegativeS&P: BB+ NegativeFitch Ratings: BBB- Stable

Telecommunication (2013)Telephones - main lines (per 100 inhabitants): 18.1Telephones - mobile cellular (per 100 inhabit.): 93.0Internet Users (per 100 inhabitants): 46.3Broadband Subscriptions (per 100 inhabitants): 11.2

Transportation (2013) Airports: 98Railways (km): 12,008Roadways (km): 385,748Waterways (km): 1,200Chief Ports: Istanbul, Izmir, Eregli

Official name: Republic of TurkeyCapital: Ankara (4.3 m)Other cities: Istanbul (13.8 m)

Izmir (3.3 m)Area (km2): 783,562Population (million, 2014 est.): 77.3Population density (per km2, 2014): 98.7Population growth rate (%, 2014 est.): 1.1Life expectancy (years, 2014 est.): 73.3Illiteracy rate (%, 2011): 5.9Language: TurkishMeasures: Metric systemTime: GMT+2

Prime Minister: Ahmet DavutoğluLast elections: 12 June 2011Next elections: 7 June 2015Central Bank Governor: Erdem Başçı

-30

0

30

60

90

1202004-06 2007-09 2010-12

Net Exports

Investment


PrivateConsumption

0

20

40

60

80

1002004-06 2007-09 2010-12

Agriculture

Manufacturing

Other Industry

Services

FOCUSECONOMICS Ukraine


April 2015

Ukraine

POLITICS | IMF approves USD 17.5 billion bailout for Ukraine, difficult debt restructuring talks begin The International Monetary Fund (IMF) approved a new USD 17.5 billion Extended Fund Facility Arrangement for Ukraine on 11 March, immediately releasing a desperately-needed USD 5.0 billion in aid to the cash-strapped country. The announcement was widely expected and followed the Ukrainian government’s approval of a number of IMF-instructed reforms intended to overhaul the country’s finances. The agreement is designed to fill part of the larger USD 40.0 billion financing gap the country faces over the next four years. International donors have pledged an additional USD 7.2 billion in aid and the country aims to generate the remaining funds through a debt restructuring operation. The debt operation, as outlined by the IMF, will focus on three objectives: generating approximately USD 15.0 billion in funds throughout the program period, reducing the public debt (% of GDP) to below 71% by 2020 and keeping the government’s gross financing needs to an average of 10% of GDP between 2019 and 2025.

Outlook deteriorates


2011-13 2014-16 2017-19Population (million): 45.5 45.2 44.9GDP (USD bn): 172 98 109GDP per capita (USD): 3,783 2,163 2,436GDP growth (%): 1.9 -3.7 3.6Fiscal Balance (% of GDP): -3.2 -5.3 -3.2Public Debt (% of GDP): 37.7 88.5 86.8Inflation (%): 1.6 21.3 7.1Current Account (% of GDP): -7.9 -2.7 -3.5External Debt (% of GDP): 78.1 152.2 148.5

Ukraine

Angela Bouzanis Economist

The Ukrainian economy recorded the largest contraction in five years in 2014, falling by 6.8%. The drastic deterioration was driven by sharp declines in private consumption and fixed investment as a result of the military conflict between the government and pro-Russia rebels in the east of the country. More recent data indicate that Ukraine’s economic crisis has carried over into 2015. Industrial production plummeted in February, hitting an over five-year low, and inflation skyrocketed further in March. The conflict has pushed the country to the brink of bankruptcy and, on 11 March, the IMF extended Ukraine a lifeline by approving a new USD 17.5 billion bailout package. The agreement is part of an international effort to shore up Ukraine’s USD 40.0 billion financing gap for the next four years. The Ukrainian government has now entered into negotiations with debt holders in an effort to generate USD 15.3 billion through a debt restructuring program.

Ukraine’s prospects continue to deteriorate rapidly. Despite the IMF’s aid, the country’s financing woes are far from solved and private consumption is expected to continue to suffer on the back of strict austerity measures. Moreover, a large amount of political uncertainty remains and whether the February peace agreement will result in a lasting resolution to the military conflict is still unknown. FocusEconomics panelists expect GDP to contract 5.8% in 2015, which is down 0.9 percentage points from last month’s forecast. The panel sees the country rebounding next year and projects that GDP will expand 1.9%.

Inflation jumped from February’s 34.5% to 45.8% in March. At its 25–26 March meeting, the Central Bank decided to keep the discount rate at 30.0%. The panel expects inflation to end 2015 at 26.8% before easing to 12.5% in 2016.



April 2015

The Ukrainian government has already begun negotiations with bond holders, but reaching an agreement will not be easy. The government is aiming to conclude negotiations with creditors by May before the IMF’s first review in June, which leaves just a short window to reach an agreement. Complicating matters, Russia is the second-largest holder of Ukrainian debt and holds a USD 3.0 billion Eurobond due in December. Russia has stated that it refuses to participate in joint restructuring talks and uncertainty remains whether a deal can be reached between the two countries.

On top of the country’s financing woes, the economy continues to show no signs of recovery. Industrial production recorded the largest contraction since August 2009 in February and inflation skyrocketed to over 45% in March. In addition, a number of the reforms included in the 2 March revised budget are likely to further dampen private consumption. Specifically, a large reduction in the state energy subsidy and hefty reductions in state employment and benefits will hurt Ukraine’s already-struggling households. On the external front, prospects are also bleak. Almost a quarter of the country’s exports originate from Donbas, one of the areas at the heart of the military conflict, and Ukraine’s largest export partner, Russia, is struggling with its own economic crisis. Ivan Tchakarov, Head of Russia/CIS Economics at Citi, adds:

The assumptions laid out in the adopted 2015 budget underscore the insurmountable challenges faced by the government. Even if the fiscal envelope appears robust (planned budget deficit at just 4.0% of GDP), the assumption of a 40% increase in revenues (following a mere 4% increase in 2014) suggests that revenues will likely undershoot, leading to a much-higher fiscal deficit that will most likely be financed by money-printing by the NBU, with grave consequences for the currency.

Going forward, Ukraine’s economy is not likely to turn around without a lasting resolution to the military conflict. While some progress has been made since the 12 February peace agreement, a number of obstacles remain. In particular, the government must amend the constitution before year-end and include some degree of decentralization of power to the eastern regions. A large amount of uncertainty remains regarding whether the Ukrainian government and pro-Russia rebels can reach an agreement over the country’s territorial future and establish a framework for elections. Adding to the political risks, the dire state of the Ukrainian economy combined with unpopular reforms could erode political support from the government.

REAL SECTOR | Revised Q4 GDP contraction slightly better than preliminary result According to official data released by State Statistics Service Ukraine, GDP contracted 14.8% in Q4 over the same period of the previous year, which was less than the previously released estimate of a 15.2% decrease. However, the contraction still represented a notable deterioration from Q3’s revised 5.5% decrease (previously reported: -5.3% year-on-year). Ukraine has entered a downward economic spiral as a result of the military conflict and political instability in the east of the country.

The drastic deterioration was driven by a worsening of the external sector combined with still weak domestic demand. Private consumption fell 13.6% annually in Q4, which was slightly better than Q3’s 15.5% decline. Fixed investment plummeted 26.2%, which followed Q3’s 26.7% decrease. In

-18

-12

-6

0

6

12

Q1 2011 Q1 2012 Q1 2013 Q1 2014 Q1 2015

%


Note: Year-on-year changes of GDP in %.Source: State Statistics Service of Ukraine and FocusEconomics Consensus Forecast.



April 2015

contrast, government consumption swung from a 0.5% contraction in Q3 to a 3.5% expansion in Q4.

On the external front, exports tumbled 31.0% in the fourth quarter (Q3: -16.8% yoy) and imports plummeted 29.0% (Q3: -31.9% yoy). As a result, the net contribution of the external sector to GDP growth fell from plus 11.3 percentage points in Q3 to plus 4.9 percentage points in Q4.

Ukraine’s outlook continues to rapidly deteriorate. The National Bank of Ukraine (NBU) expects GDP to contract 7.5% in 2015 and rebound to a 3.0% expansion in 2016. FocusEconomics panelists have downgraded Ukraine’s 2015 economic outlook for the tenth month in a row. Panelists now expect GDP to contract 5.8% in 2015, which is down 0.9 percentage points from last month’s forecast. For 2016, panelists expect the economy to recover to a 1.9% expansion.

REAL SECTOR | Industrial production continues to plummet in FebruaryIn February, industrial production fell 22.5% over the same month last year, according to data released by the State Statistics Service of Ukraine. The result was a deterioration from January’s 21.3% decrease and marked the 14th consecutive month of decline amid the geopolitical tensions in the country. Further, February’s figure marked the sharpest drop in 66 months. Significant falls were recorded in manufacturing, mining and quarrying, as well as in electricity, steam, gas and air conditioning.

The ongoing crisis between the Ukrainian government and pro-Russian separatist groups continues to have a large negative impact on industry, which is already weak. Large contractions were recorded in the eastern regions of Luhansk and Donetsk, Ukraine’s industrial heartland and where the conflict has been centered. Industrial output in February plummeted 89.0% annually in Luhansk and 49.4% in Donetsk.

On a monthly basis, industrial production decreased a seasonally-adjusted 1.6% in February, which was a significant improvement from the 19.7% fall in January. The annual average variation in industrial output fell to minus 13.1% from January’s minus 11.5%.

FocusEconomics Consensus Forecast participants’ project that industrial output will contract 8.9% in 2015, which is down 1.6 percentage points from last month’s forecast. For 2016, panelists expect industrial production to expand 2.9%.

MONETARY SECTOR | Inflation jumps to over 45%Consumer prices increased 10.8% in March over the previous month, which was notably above the 5.3% rise registered in February. March’s acceleration was driven by an almost across-the-board increase in inflation, with only prices for alcoholic beverages and tobacco rising at a smaller pace than the previous month.

Inflation continued surging upward, reaching 45.8% in March. The result was up from the 34.5% tallied in February and marked a multi-year high. Inflation has skyrocketed since the onset of the military conflict in Eastern Ukraine, pushed up by sharp increases in the price for gas along with a drastic depreciation of the hryvnia. In addition, annual average variation in consumer prices increased from 17.3% in February to 20.8% in March, which marked the highest level since June 2009.


Note: Year-on-year and month-on-month variation of consumer price index in %.Source: State Statistics Service of Ukraine.

-30

0

30

60

-6

0

6

12




%%

Industrial Production | annual variation in %

Note: Year-on-year and annual average variation of industrial production index in %.Source: State Statistics Service of Ukraine and FocusEconomics calculations.

-30

-20

-10

0

10



%



April 2015

FocusEconomics Consensus Forecast panelists expect inflation to end 2015 at 26.8%, which is up 5.7 percentage points from last month’s forecast. For 2016, the panel sees inflation easing to 12.5%.

MONETARY SECTOR | Central Bank holds interest rate at 15-year highAt its 25-26 March Monetary Policy meeting, the National Bank of Ukraine (NBU) decided to leave the discount rate unchanged at 30.0%. As a result, the discount rate remains at the highest level since 2000.

In its accompanying statement, the Central Bank stated that pressures in the foreign exchange market have showed signs of easing in recent weeks, although expectations for depreciation remains. The Bank added that high levels of inflation are expected and there is a risk of money market instability going forward. Against this backdrop, and with a goal of putting inflation on a downward path, the NBU decided to keep the discount rate at a historically high level. Going forward, the Central Bank expects slowly to lower interest rates as the hryvnia’s value stabilizes.

In addition to its monetary policy decision, the Central Bank also approved proposals for a new version of the Monetary Policy Fundamentals for 2015 and the Inflation Report. The Central Bank stated that the Monetary Policy Fundamentals for 2015 are based on three goals: (I) fulfilling the commitments outlined in the IMF’s Extended Fund Facility program; (II) adopt an inflation targeting regime once the necessary macroeconomic prerequisites are achieved; and (III) achieve an inflation rate of 5% a year in the medium term.

Looking forward, the NBU expects the Ukrainian economy to return to growth in Q2 2015 (quarter-on-quarter terms), driven largely by the external sector and the utilization of spare capacity. For 2015, the Central Bank forecasts GDP to contract by 7.5% due to a base effect and rebound to 3% growth in 2016. Regarding price developments, the Bank stated that due to the drastic depreciation of the hryvnia, combined with increases in the prices of housing and utilities, it expects inflation to end-2015 at 30.0% before softening to 13.0% by the end of next year.

FocusEconomics Consensus Forecast panelists expect an average of 21.05% for the NBU’s discount rate this year. For 2016, panelists expect the discount rate to fall to 14.67%.

MONETARY SECTOR | Ukrainian hryvnia shows signs of stabilization following large appreciationThe Ukrainian hryvnia (UAH) has begun to show signs of stabilizing in recent weeks, following the extremely high volatility that has characterized the currency over the past year. The hryvnia hit an all-time low against the greenback on 26 February, ending the day at 33.75 UAH per USD, which represented a 108.2% depreciation over the same day of the previous month. Following the drastic plunge, the hryvnia rebounded to a high of 21.50 UAH per USD on 10 March, which represented a 21.1% appreciation over the same day of the previous month. The strong rebound was driven by optimism surrounding the approval of IMF funds and stabilization measures undertaken by Ukraine’s Central Bank.

In recent days, the hryvnia has remained between 21.50 UAH per USD and 24.00 UAH per USD. This relative stability is due in part to the role the National Bank of Ukraine (NBU) has played in managing the exchange rate. In a statement released on 4 April, the NBU stated that it has undertaken

Exchange Rate | UAH per USD

Note: Daily spot exchange rate of Ukrainian hryvnia (UAH) against U.S. dollar (USD)..Source: Thomson Reuters.

5

15

25

35


NBU Discount Rate | in %

Note: NBU discount rate in %.Source: The National Bank of Ukraine (NBU).

4.0

12.0

20.0

28.0

36.0


%



April 2015

purchase and sale interventions in March to help “mitigate sharp fluctuations in the demand for and supply for foreign exchange that occurred on an ad hoc basis.” Going forward, the NBU added that it is focused on sustaining stability in the foreign exchange market.

FocusEconomics Consensus Forecast panelists are still taking into account recent developments and expect the hryvnia to trade at 25.77 UAH per USD at the end of 2015. For 2016, the panel sees the Ukrainian currency trading at 25.18 UAH per USD.



April 2015


Annual Data 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019Real Sector Population (million) 45.8 45.6 45.5 45.4 45.3 45.2 45.1 45.0 44.9 44.8GDP per capita (USD) 2,971 3,575 3,806 3,967 2,849 1,750 1,889 2,159 2,431 2,718GDP (USD bn) 136 163 173 180 129 79 85 97 109 122GDP per capita (EUR) 2,272 2,566 3,014 2,997 2,142 1,644 1,789 1,965 2,114 2,288GDP (EUR bn) 104 117 137 136 97 74 81 88 95 103GDP (UAH bn) 1,079 1,300 1,405 1,465 1,567 1,935 2,303 2,623 2,935 3,239Economic Growth (Nominal GDP, ann. var. in %) 18.2 20.4 8.1 4.3 6.9 25.0 19.0 13.9 11.9 10.3Economic Growth (GDP, annual var. in %) 4.1 5.5 0.2 0.0 -6.8 -5.8 1.9 2.9 3.6 4.4Private Consumption (annual var. in %) 7.1 15.7 8.4 6.9 -9.6 -7.6 1.7 2.9 3.7 4.5Government Consumption (ann. var. in %) 4.0 -2.9 4.5 -0.9 0.6 - - - - -Fixed Investment (annual var. in %) 3.9 8.5 5.0 -8.4 -23.0 -12.1 4.5 5.4 5.9 6.5Industrial Production (annual var. in %) 11.2 8.0 -0.5 -4.3 -10.1 -8.9 2.9 3.9 4.4 5.0Retail Sales (annual var. in %) 10.1 13.7 13.7 5.6 -9.6 - - - - -Unemployment (% of active population, eop) 8.1 7.9 7.8 7.4 9.4 10.7 9.9 9.0 8.1 7.2Fiscal Balance (% of GDP) -6.0 -1.8 -3.6 -4.3 -4.6 -6.4 -4.9 -3.9 -3.2 -2.5Public Debt (% of GDP) 40.1 36.4 36.7 39.9 70.3 96.6 98.8 91.1 86.8 82.6Monetary and Financial Sector Money (annual variation of M2 in %) 23.1 14.2 13.1 17.5 5.4 - - - - -Inflation (CPI, annual variation in %, eop) 9.1 4.6 -0.2 0.5 24.9 26.8 12.5 9.4 7.1 4.9Inflation (CPI, annual variation in %, aop) 9.4 8.0 0.6 -0.3 12.1 - - - - -Inflation (PPI, annual variation in %, eop) 20.9 19.0 3.7 -0.1 17.1 - - - - -NBU Discount Rate (%, eop) 7.75 7.75 7.50 6.50 14.00 21.05 14.67 12.47 10.70 8.93Stock Market (PFTS variation in %) 70.2 -45.2 -38.5 -8.6 28.8 - - - - -Exchange Rate (UAH per USD, eop) 7.97 8.01 8.05 8.24 15.82 25.77 25.18 24.98 24.45 23.92Exchange Rate (UAH per USD, aop) 7.97 7.99 8.08 8.15 12.02 23.97 25.46 25.08 24.71 24.19Exchange Rate (UAH per EUR, eop) 10.66 10.37 10.62 11.33 19.14 26.76 26.93 28.18 28.65 28.82Exchange Rate (UAH per EUR, aop) 10.58 11.12 10.39 10.83 15.87 25.52 26.90 27.55 28.41 28.73External Sector Current Account Balance (% of GDP) -2.2 -6.3 -8.2 -9.2 -4.1 -1.8 -2.1 -2.7 -3.5 -4.2Current Account Balance (USD bn) -3.0 -10.2 -14.3 -16.5 -5.3 -1.4 -1.8 -2.6 -3.8 -5.1Merchandise Trade Balance (USD bn) -9.6 -18.0 -21.9 -22.1 -7.7 -2.8 -3.1 -4.1 -6.4 -9.4Merchandise Exports (USD bn) 47.3 62.4 64.4 59.1 50.6 49.4 52.1 55.6 59.1 62.5Merchandise Imports (USD bn) 56.9 80.4 86.3 81.2 58.2 51.8 54.7 59.7 65.5 71.9Merchandise Exports (annual variation in %) 27.4 31.9 3.3 -8.3 -14.5 -2.4 5.5 6.8 6.3 5.8Merchandise Imports (annual variation in %) 33.9 41.3 7.3 -5.8 -28.4 -11.0 5.6 9.3 9.6 9.9International Reserves (USD bn) 34.6 31.8 24.6 20.4 7.5 12.6 15.6 19.3 21.1 23.0International Reserves (months of imports) 7.3 4.7 3.4 3.0 1.6 2.9 3.4 3.9 3.9 3.8External Debt (USD bn) 117 126 135 142 126 144 151 158 161 165External Debt (% of GDP) 86.0 77.3 78.0 78.9 97.7 181.7 177.4 162.3 147.7 135.3 Quarterly Data Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16Economic Growth (GDP, annual var. in %) -5.5 -14.8 -10.2 -7.3 -4.5 -1.3 0.2 1.2 2.4 4.0Inflation (CPI, annual variation in %, eop) 17.5 24.9 45.8 32.6 29.8 26.8 17.8 16.1 14.8 12.5NBU Discount Rate (%, eop) 12.50 14.00 30.00 27.92 24.25 21.05 18.25 18.00 17.33 14.67Exchange Rate (UAH per USD, eop) 12.95 15.82 23.44 24.52 25.42 25.77 25.63 25.48 25.28 25.18Exchange Rate (UAH per EUR, eop) 16.36 19.14 25.16 25.83 26.34 26.76 26.89 26.94 26.90 26.93 Monthly Data Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15Industrial Production (annual var. in %) -4.4 -11.4 -20.0 -15.5 -15.6 -15.6 -17.1 -21.3 -22.5 -Inflation (CPI, mom variation in %) 1.0 0.4 0.8 2.9 2.4 1.9 3.0 3.1 5.3 10.8Inflation (CPI, annual variation in %) 12.0 12.6 14.2 17.5 19.8 21.8 24.9 28.5 34.5 45.8Exchange Rate (UAH per USD, eop) 11.75 12.28 13.20 12.95 13.00 15.02 15.82 16.21 27.25 23.44Exchange Rate (UAH per EUR, eop) 16.09 16.44 17.33 16.36 16.28 18.70 19.14 18.30 30.51 25.16International Reserves (USD bn) 17.1 16.1 15.9 16.4 12.6 10.0 7.5 6.4 5.6 10.0



April 2015

0%

10%

20%

30%

40%

50%

< -12.0 -10.0 -8.0 -6.0 -4.0 -2.0 0.0 2.0 > 2.0


1 | Real GDP | 2000-2019 | var. in %




Notes and sources

Long-term chart period from 2000 to 2019 unless otherwise stated. All real sector data are from the State Statistics Service of Ukraine (Ukrstat). Forecasts are based on FocusEconomics Consensus Forecast.1 GDP, real annual variation in %. 2 Quarterly GDP (seasonally adjusted), year-on-year variation in %.3 GDP, evolution of 2015 forecasts during the last 18 months.4 GDP, evolution of 2016 forecasts during the last 18 months.5 GDP, panelist distribution of 2015 forecasts. Concentration of panelists in forecast interval in


Individual Forecasts 2015 2016Alfa-Bank -9.0 -BofA Merrill Lynch -5.0 -0.1Capital Economics -3.0 2.5CASE Ukraine -5.2 -Citigroup Global Mkts -5.2 1.9Concorde Capital -5.7 -Credit Suisse -5.9 2.3DekaBank -5.5 2.8Deutsche Bank -4.5 1.5Dragon Capital -5.0 1.5EIU -5.8 2.0Frontier Strategy Group -6.0 1.0Goldman Sachs -3.5 1.9HSBC -9.2 2.1ICPS -6.6 3.3Investment Capital Ukraine -7.6 0.0JPMorgan -7.6 4.1KUKE S.A. -3.0 1.0Macro-Advisory Ltd. -5.5 2.0Nomura -3.1 3.2OTP Bank -5.9 3.3Oxford Economics -8.0 6.5Raiffeisen Research -5.5 0.5Sberbank -3.8 -2.0SEB -6.0 1.0SP Advisors -8.6 3.5The Bleyzer Foundation -5.0 2.0UniCredit -9.3 1.6WIIW -5.0 0.0SummaryMinimum -9.3 -2.0Maximum -3.0 6.5Median -5.5 2.0Consensus -5.8 1.9History30 days ago -4.9 1.960 days ago -3.9 1.990 days ago -2.8 2.2Additional ForecastsIMF (Mar. 2015) -5.5 2.0Central Bank (Mar. 2015) -7.5 3.0

-20

-10

0

10

20

2000 2005 2010 2015

UkraineEastern EuropeWorld

-18

-12

-6

0

6

Q1 12 Q1 13 Q1 14 Q1 15 Q1 16

UkraineEastern EuropeWorld

-3

0

3

6

9



-10

-5

0

5

10






April 2015



-15

-10

-5

0

5

10


2015 2016


-60

-40

-20

0

20

40

2000 2005 2010 2015

UkraineEastern Europe


-9

-6

-3

0

3

6


2015 2016


-20

-10

0

10

20

30

2000 2005 2010 2015


Individual Forecasts 2015 2016 2015 2016Alfa-Bank -18.0 - -25.0 -BofA Merrill Lynch - - - -Capital Economics -3.0 2.0 -5.0 7.0CASE Ukraine -12.0 - -18.1 -Citigroup Global Mkts -6.5 3.5 -6.8 5.5Concorde Capital -14.2 - -20.9 -Credit Suisse -5.2 1.8 -12.9 4.5DekaBank - - - -Deutsche Bank -5.2 0.6 - -Dragon Capital -7.0 -3.0 -5.0 12.0EIU -10.0 1.0 -20.0 4.0Frontier Strategy Group -12.0 3.0 - -Goldman Sachs - - - -HSBC -12.0 2.0 -13.8 3.0ICPS -8.0 3.5 -17.2 6.9Investment Capital Ukraine - - - -JPMorgan - - - -KUKE S.A. -3.0 1.0 -6.0 2.0Macro-Advisory Ltd. 1.0 3.0 -5.0 4.0Nomura -2.8 3.4 - -OTP Bank -7.8 2.8 -12.1 8.0Oxford Economics 0.9 3.3 -2.7 10.8Raiffeisen Research -10.0 -4.0 -10.5 0.0Sberbank - - - -SEB - - - -SP Advisors -11.0 4.0 -21.0 5.0The Bleyzer Foundation -5.0 2.0 -2.3 2.0UniCredit -12.0 2.0 -15.0 2.5WIIW -4.5 -0.5 -10.0 -5.0SummaryMinimum -18.0 -4.0 -25.0 -5.0Maximum 1.0 4.0 -2.3 12.0Median -7.4 2.0 -12.1 4.3Consensus -7.6 1.7 -12.1 4.5History30 days ago -6.1 1.6 -10.3 4.460 days ago -4.2 1.6 -7.1 3.790 days ago -2.7 2.2 -3.5 4.4


Notes and sources

Long-term chart period from 2000 to 2019 unless otherwise stated. All real sector data are from the State Statistics Service of Ukraine (Ukrstat). Forecasts are based on FocusEconomics Consensus Forecast.6 Private consumption, annual variation in %. 7 Private consumption, evolution of 2015 and 2016 forecasts during the last 18 months.8 Gross fixed investment, annual variation in %.9 Gross fixed investment, evolution of 2015 and 2016 forecasts during the last 18 months.




April 2015


Individual Forecasts 2015 2016 2015 2016Alfa-Bank -10.0 - - -BofA Merrill Lynch - - - -Capital Economics - - 10.0 8.0CASE Ukraine -13.4 - - -Citigroup Global Mkts - - 9.5 9.0Concorde Capital -14.6 - 12.3 -Credit Suisse - - 12.0 11.0DekaBank - - - -Deutsche Bank -3.2 2.8 9.2 8.4Dragon Capital -9.0 3.0 12.0 12.0EIU -7.0 3.0 10.0 9.0Frontier Strategy Group -12.0 2.0 13.0 12.0Goldman Sachs - - - -HSBC -7.8 6.0 8.8 8.5ICPS -12.4 3.3 10.5 8.7Investment Capital Ukraine - - 10.8 9.7JPMorgan - - - -KUKE S.A. -7.0 2.0 9.8 9.5Macro-Advisory Ltd. -13.0 3.0 10.0 9.0Nomura - - - -OTP Bank - - - -Oxford Economics -2.6 7.5 9.0 8.3Raiffeisen Research -7.0 0.0 10.5 10.5Sberbank - - - -SEB - - 9.3 9.0SP Advisors -16.2 3.5 11.8 11.6The Bleyzer Foundation -7.5 3.0 12.0 11.0UniCredit -2.7 1.5 11.5 11.0WIIW -6.0 0.0 11.5 12.5SummaryMinimum -16.2 0.0 8.8 8.0Maximum -2.6 7.5 13.0 12.5Median -7.8 3.0 10.5 9.5Consensus -8.9 2.9 10.7 9.9History30 days ago -7.3 2.9 10.5 9.660 days ago -6.0 3.1 10.2 9.590 days ago -4.3 3.4 9.3 8.6


Notes and sources

Long-term chart period from 2000 to 2019 unless otherwise stated. All real sector data are from the State Statistics Service of Ukraine (Ukrstat) and International Monetary Fund (IMF). Forecasts are based on FocusEconomics Consensus Forecast.10 Industrial production, annual variation in %. Source: Ukrstat.11 Industrial production, evolution of 2015 and 2016 forecasts during the last 18 months.12 Unemployment, % of active population. Source: IMF.13 Unemployment, evolution of 2015 and 2016 forecasts during the last 18 months.


-30

-20

-10

0

10

20

2000 2005 2010 2015



-12

-8

-4

0

4

8


2015 2016


6

8

10

12

2000 2005 2010 2015

Ukraine

Eastern Europe


7

8

9

10

11


2015 2016



April 2015


30

50

70

90

110


2015 2016


0

30

60

90

120

2000 2005 2010 2015

Ukraine

Eastern Europe


-8

-6

-4

-2

0

2

2000 2005 2010 2015

Ukraine

Eastern Europe


-7

-6

-5

-4

-3

-2


2015 2016



Individual Forecasts 2015 2016 2015 2016Alfa-Bank -4.8 - - -BofA Merrill Lynch -13.0 -12.0 108.9 128.7Capital Economics -5.0 -4.0 73.0 73.0CASE Ukraine -4.2 - 98.6 -Citigroup Global Mkts -6.0 -4.0 - -Concorde Capital -4.1 - 97.1 -Credit Suisse -6.3 -5.5 118.0 129.0DekaBank -6.0 -5.8 - -Deutsche Bank -4.5 -3.0 74.0 82.0Dragon Capital -5.2 -3.5 99.9 102.2EIU -4.6 -4.4 94.7 94.4Frontier Strategy Group - - - -Goldman Sachs - - - -HSBC - - 87.8 90.6ICPS - - - -Investment Capital Ukraine -7.5 -3.6 - -JPMorgan -15.0 -5.3 127.7 126.3KUKE S.A. -7.5 -6.0 80.0 82.0Macro-Advisory Ltd. -5.0 -2.5 - -Nomura -5.2 -4.4 - -OTP Bank -4.2 -4.0 84.2 76.2Oxford Economics -10.6 -7.9 - -Raiffeisen Research -7.0 -5.5 105.0 104.0Sberbank - - - -SEB -6.1 -4.7 102.0 107.0SP Advisors -4.9 -4.5 79.4 78.0The Bleyzer Foundation -7.5 -4.0 94.0 92.0UniCredit -4.5 -3.9 99.3 89.7WIIW -5.5 -5.0 115.0 125.0SummaryMinimum -15.0 -12.0 73.0 73.0Maximum -4.1 -2.5 127.7 129.0Median -5.4 -4.4 97.9 93.2Consensus -6.4 -4.9 96.6 98.8History30 days ago -6.7 -5.2 95.0 101.460 days ago -6.2 -4.8 83.5 87.290 days ago -5.9 -4.9 77.8 79.6


Notes and sources

Long-term chart period from 2000 to 2019 unless otherwise stated. All real sector data are from the Ministry of Finance (Minfin). Forecasts are based on FocusEconomics Consensus Forecast.14 General government balance as % of GDP. 15 General government balance as % of GDP, evolution of 2015 and 2016 forecasts during the last 18 months. 16 Public debt as % of GDP. 17 Public debt as % of GDP, evolution of 2015 and 2016 forecasts during the last 18 months.



April 2015

0%

10%

20%

30%

40%

< 5.0 12.0 19.0 26.0 33.0 40.0 47.0 54.0 > 54.0


18 | Inflation | 2000 - 2019 | in %


19 | Inflation | Q1 12-Q4 16 | in %


Notes and sources

Long-term chart period from 2000 to 2019 unless otherwise stated. All real sector data are from the State Statistics Service of Ukraine (Ukrstat). Forecasts are based on FocusEconomics Consensus Forecast.18 Inflation, annual variation of consumer price index (CPI) in % (eop).19 Quarterly inflation, annual variation of consumer price index (CPI) in % (eop).20 Inflation, evolution of 2015 forecasts during the last 18 months.21 Inflation, evolution of 2016 forecasts during the last 18 months.22 Inflation, panelist distribution of 2015 forecasts. Concentration of panelists in forecast interval


Individual Forecasts 2015 2016Alfa-Bank 40.2 -BofA Merrill Lynch 30.0 15.0Capital Economics 25.0 10.0CASE Ukraine 36.0 -Citigroup Global Mkts 15.5 9.4Concorde Capital 31.7 -Credit Suisse 29.0 15.0DekaBank 30.0 10.5Deutsche Bank 14.0 6.0Dragon Capital 23.0 10.0EIU 21.7 9.0Frontier Strategy Group 30.0 18.0Goldman Sachs - -HSBC 15.0 7.0ICPS 35.1 8.0Investment Capital Ukraine 25.1 16.4JPMorgan 35.7 19.4KUKE S.A. 17.0 11.0Macro-Advisory Ltd. 16.0 12.0Nomura 17.9 8.1OTP Bank - -Oxford Economics 35.0 18.0Raiffeisen Research 30.0 20.0Sberbank - -SEB 31.0 17.0SP Advisors 31.2 15.9The Bleyzer Foundation 30.0 10.0UniCredit 15.7 13.9WIIW 37.0 9.0SummaryMinimum 14.0 6.0Maximum 40.2 20.0Median 30.0 11.0Consensus 26.8 12.5History30 days ago 21.1 10.560 days ago 15.2 9.390 days ago 12.6 8.2Additional ForecastsIMF (Mar. 2015) 27.6 10.6Central Bank (Mar. 2015) 30.0 13.0



0

10

20

30

40

50



-10

0

10

20

30

2000 2005 2010 2015


0

5

10

15

20

25



-20

0

20

40

60

Q1 12 Q1 13 Q1 14 Q1 15 Q1 16




April 2015

0%

10%

20%

30%

40%

< 9.00 14.00 19.00 24.00 29.00 34.00 39.00 44.00 > 44.00


23 | Interest Rate | 2000 - 2019 | in %




Notes and sources

Long-term chart period from 2000 to 2019 unless otherwise stated. All real sector data are from the National Bank of Ukraine (NBU). Forecasts are based on FocusEconomics Consensus Forecast.23 Interest rate, NBU Discount Rate in % (eop).24 Interest rate, NBU Discount Rate in % (eop).25 Interest rate, evolution of 2015 forecasts during the last 18 months. 26 Interest rate, evolution of 2016 forecasts during the last 18 months.27 Interest rate, panelist distribution of 2015 forecasts. Concentration of panelists in forecast


Individual Forecasts 2015 2016Alfa-Bank - -BofA Merrill Lynch 25.00 20.00Capital Economics - -CASE Ukraine - -Citigroup Global Mkts 20.00 12.00Concorde Capital 19.50 -Credit Suisse 25.00 18.00DekaBank - -Deutsche Bank 15.00 -Dragon Capital - -EIU - -Frontier Strategy Group - -Goldman Sachs - -HSBC 20.00 10.00ICPS - -Investment Capital Ukraine 30.00 20.00JPMorgan - -KUKE S.A. 25.00 20.00Macro-Advisory Ltd. - -Nomura 15.00 8.00OTP Bank 15.00 9.00Oxford Economics - -Raiffeisen Research - -Sberbank - -SEB - -SP Advisors - -The Bleyzer Foundation - -UniCredit 22.00 15.00WIIW - -SummaryMinimum 15.00 8.00Maximum 30.00 20.00Median 20.00 15.00Consensus 21.05 14.67History30 days ago 18.60 12.1360 days ago 13.08 9.5590 days ago 11.57 9.31


Interest Rate | Discount Rate

5

15

25

35



0

10

20

30

40

2000 2005 2010 2015


4

9

14

19

24



0

10

20

30

40

Q1 12 Q1 13 Q1 14 Q1 15 Q1 16

Ukraine

Eastern Europe



April 2015

0%

10%

20%

30%

40%

50%

< 15.0 18.0 21.0 24.0 27.0 30.0 33.0 36.0 > 36.0


28 | Exchange Rate | UAH per USD

30 | UAH per USD 2015 | evol. of fcst

29 | Exchange Rate | UAH per USD

31 | UAH per USD 2016 | evol. of fcst

Notes and sources

Long-term chart period from 2000 to 2019 unless otherwise stated. All real sector data are from the National Bank of Ukraine (NBU). Forecasts are based on FocusEconomics Consensus Forecast.28 Exchange rate, UAH per USD (eop).29 Quarterly exchange rate, UAH per USD (eop).30 Exchange rate, evolution of 2015 forecast during the last 18 months.31 Exchange rate, evolution of 2016 forecast during the last 18 months.32 Exchange rate, panelist distribution of 2015 forecasts. Concentration of panelists in forecast


Individual Forecasts 2015 2016Alfa-Bank 25.0 -BofA Merrill Lynch 29.9 33.0Capital Economics - -CASE Ukraine 30.0 -Citigroup Global Mkts 25.1 25.0Concorde Capital 25.0 -Credit Suisse 23.0 23.0DekaBank - -Deutsche Bank 29.2 15.0Dragon Capital 23.0 23.0EIU 24.0 24.7Frontier Strategy Group - -Goldman Sachs 20.0 18.0HSBC 25.0 23.0ICPS 25.0 25.0Investment Capital Ukraine 26.0 28.0JPMorgan 28.0 32.0KUKE S.A. 25.0 24.0Macro-Advisory Ltd. - -Nomura - -OTP Bank 26.9 26.9Oxford Economics 22.0 20.0Raiffeisen Research 30.0 37.0Sberbank - -SEB 30.0 20.0SP Advisors 22.8 23.5The Bleyzer Foundation 25.0 25.0UniCredit 22.8 24.5WIIW 30.0 33.0SummaryMinimum 20.0 15.0Maximum 30.0 37.0Median 25.0 24.6Consensus 25.8 25.2History30 days ago 26.2 26.660 days ago 18.7 18.690 days ago 16.5 16.5

32 | UAH per USD 2015 | Panelist Distribution

Exchange Rate | UAH per USD

5

15

25

35



3

9

15

21

27

2000 2005 2010 2015

5

15

25

35

45



6

12

18

24

30

Q1 12 Q1 13 Q1 14 Q1 15 Q1 16



April 2015


-20

-15

-10

-5

0


2015 2016


-75

0

75

150

2000 2005 2010 2015



-12

-6

0

6

12

2000 2005 2010 2015



-6

-5

-4

-3

-2

-1


2015 2016



Individual Forecasts 2015 2016 2015 2016Alfa-Bank -0.3 - - -BofA Merrill Lynch -3.5 -3.3 - -Capital Economics -2.5 -3.0 - -CASE Ukraine -2.3 - - -Citigroup Global Mkts -3.1 -2.4 -8.0 -8.2Concorde Capital -2.5 - -3.7 -Credit Suisse -1.9 -1.6 - -DekaBank -2.9 -3.5 - -Deutsche Bank -2.5 -2.0 -5.0 -4.0Dragon Capital -3.3 -2.3 -3.0 -3.0EIU -2.5 -4.0 -3.1 -4.9Frontier Strategy Group - - - -Goldman Sachs 0.4 -1.1 - -HSBC - - 10.1 12.1ICPS 4.3 2.0 3.3 3.0Investment Capital Ukraine -3.1 -1.2 - -JPMorgan 0.7 0.4 0.8 0.3KUKE S.A. -4.0 -3.8 -9.0 -12.0Macro-Advisory Ltd. 0.0 -2.0 - -Nomura -3.8 -5.1 - -OTP Bank -3.0 -2.5 - -Oxford Economics -1.5 -2.8 -13.8 -16.2Raiffeisen Research -1.0 -0.8 -0.7 -0.7Sberbank - - - -SEB -2.0 -2.6 - -SP Advisors -2.9 -3.5 - -The Bleyzer Foundation -1.2 -0.5 -0.8 -0.2UniCredit -0.4 -1.0 - -WIIW -2.2 -1.3 -4.0 -3.0SummaryMinimum -4.0 -5.1 -13.8 -16.2Maximum 4.3 2.0 10.1 12.1Median -2.4 -2.3 -3.1 -3.0Consensus -1.8 -2.1 -2.8 -3.1History30 days ago -1.9 -2.3 -2.6 -3.060 days ago -2.3 -2.5 -4.3 -4.490 days ago -2.7 -2.8 -5.6 -5.7


Notes and sources

Long-term chart period from 2000 to 2019 unless otherwise stated. All real sector data are from the National Bank of Ukraine (NBU). Forecasts are based on FocusEconomics Consensus Forecast.33 Current account balance, as % of GDP.34 Current account balance, evolution of 2015 and 2016 forecasts during the last 18 months.35 Trade balance, exports and imports, in USD. 36 Trade balance, evolution of 2015 and 2016 forecasts during the last 18 months.



April 2015


Exports and Imports

Individual Forecasts 2015 2016 2015 2016Alfa-Bank - - - -BofA Merrill Lynch - - - -Capital Economics - - - -CASE Ukraine - - - -Citigroup Global Mkts - - - -Concorde Capital 39.9 - 43.6 -Credit Suisse - - - -DekaBank - - - -Deutsche Bank 54.0 53.0 59.0 57.0Dragon Capital 45.0 47.0 48.0 50.0EIU 47.1 49.4 50.2 54.3Frontier Strategy Group - - - -Goldman Sachs - - - -HSBC 50.9 51.3 40.8 39.2ICPS 51.4 55.0 48.1 52.0Investment Capital Ukraine - - - -JPMorgan 51.7 51.7 50.9 51.4KUKE S.A. 53.0 57.0 62.0 69.0Macro-Advisory Ltd. - - - -Nomura - - - -OTP Bank - - - -Oxford Economics 56.2 60.6 70.1 76.8Raiffeisen Research 53.3 53.8 54.0 54.5Sberbank - - - -SEB - - - -SP Advisors - - - -The Bleyzer Foundation 49.8 53.0 50.6 53.2UniCredit - - - -WIIW 40.0 41.0 44.0 44.0SummaryMinimum 39.9 41.0 40.8 39.2Maximum 56.2 60.6 70.1 76.8Median 51.2 53.0 50.4 53.2Consensus 49.4 52.1 51.8 54.7History30 days ago 51.1 53.8 53.7 56.860 days ago 55.2 58.2 59.5 62.690 days ago 59.1 61.8 64.7 67.5


Notes and sources

Long-term chart period from 2000 to 2019 unless otherwise stated. All real sector data are from the National Bank of Ukraine (NBU). Forecasts are based on FocusEconomics Consensus Forecast.37 Exports, annual variation in %. 38 Exports, evolution of 2015 and 2016 forecasts during the last 18 months.39 Imports, annual variation in %. 40 Imports, evolution of 2015 and 2016 forecasts during the last 18 months.

40

60

80

100

120


2015 2016


-50

-25

0

25

50

2000 2005 2010 2015



-50

-25

0

25

50

2000 2005 2010 2015



40

60

80

100


2015 2016




April 2015


140

150

160

170

180


2015 2016


0

50

100

150

200

2000 2005 2010 2015

Ukraine

Eastern Europe


0

5

10

15

2000 2005 2010 2015



10

15

20

25

30


2015 2016



Individual Forecasts 2015 2016 2015 2016Alfa-Bank 14.0 - - -BofA Merrill Lynch 14.0 15.0 136 136Capital Economics - - - -CASE Ukraine 12.6 - - -Citigroup Global Mkts 14.7 17.8 155 176Concorde Capital 11.5 - 131 -Credit Suisse 18.4 19.0 148 154DekaBank - - - -Deutsche Bank 10.0 15.0 116 128Dragon Capital 10.0 15.0 138 145EIU - - 127 135Frontier Strategy Group - - - -Goldman Sachs - - - -HSBC 9.4 13.0 144 146ICPS 12.7 18.1 - -Investment Capital Ukraine 10.7 15.6 139 143JPMorgan 13.1 6.9 - -KUKE S.A. 10.0 11.0 150 153Macro-Advisory Ltd. 15.0 20.0 180 190Nomura 16.2 21.4 - -OTP Bank - - - -Oxford Economics 9.6 11.1 150 153Raiffeisen Research 10.4 12.4 145 150Sberbank - - - -SEB - - - -SP Advisors 14.5 21.2 - -The Bleyzer Foundation 13.0 17.0 153 156UniCredit - - - -WIIW - - - -SummaryMinimum 9.4 6.9 116 128Maximum 18.4 21.4 180 190Median 12.7 15.3 145 150Consensus 12.6 15.6 144 151History30 days ago 12.4 14.9 145 15160 days ago 12.1 16.1 145 15190 days ago 14.1 17.7 146 154


Notes and sources

Long-term chart period from 2000 to 2019 unless otherwise stated. All real sector data are from the National Bank of Ukraine (NBU). Forecasts are based on FocusEconomics Consensus Forecast.41 International reserves, months of imports. 42 International reserves, evolution of 2015 and 2016 forecasts during the last 18 months.43 External debt as % of GDP. 44 External debt, evolution of 2015 and 2016 forecasts during the last 18 months.



April 2015

Ukraine in the Region


Fact Sheet

Ukraine 2.9%

Russia 45.9%

Turkey 18.1%

Poland 12.4%

Czech Republic

4.7%

Other16.0%

Ukraine 12.2%

Russia 38.8%

Turkey 20.9%

Poland 10.4%

Romania 5.4%

Other12.3%

Russia32.4%

Other EU-27

22.9%

Germany8.0%

Other Asia ex-Japan

5.7%

China9.3%

Other21.6%

Russia25.6%

Turkey5.4%

EU-2724.9%

Asia ex-Japan8.3%

Other35.8%

Other4.6%


Mineral Fuels32.8%

Food8.4%

Other1.7%


Ores & Metals7.4%

Mineral Fuels6.6%

Food21.3%

Trade Structure



Economic Structure


Exports

Exports

Imports

Imports

General Data


Political Data



• High literacy rate• Rich in mineral resources

• Ongoing geopolitical tensionin the region

• Monetary policy focused on exchange rate stability• High dependence on Russia’s energy supply

Energy (2012)Primary Energy Production (trillion Btu): 3,271Primary Energy Consumption (trillion Btu): 5,046Electricity Generation (billion kW-h): 187Electricity Consumption (billion kW-h): 160Oil Supply (thousand bpd): 80Oil Consumption (thousand bpd): 276CO2 Emmissions (million metric tons): 290

Agency Rating OutlookMoody’s: Ca NegativeS&P: CCC- NegativeFitch Ratings: CC -


Transportation (2013) Airports: 187Railways (km): 21,619Roadways (km): 169,694Waterways (km): 1,672Chief Ports: Kiev, Odessa

Official name: UkraineCapital: Kiev (2.8m)Other cities: Kharkiv (1.5m)

Odessa (1.0m)Area (km2): 603,550Population (million, 2014 est.): 45.3Population density (per km2, 2014): 75.0Population growth rate (%, 2014 est.): -0.6Life expectancy (years, 2014 est.): 69.1Illiteracy rate (%, 2011): 0.3Language: UkrainianMeasures: Metric systemTime: GMT+2

President: Petro PoroshenkoLast elections: 25 May 2014Next elections: 2018Central Bank President: Valeriya Gontareva

-20

0

20

40

60

80

100

1202004-06 2007-09 2010-12

Net Exports

Investment


PrivateConsumption

0

20

40

60

80

1002004-06 2007-09 2010-12

Agriculture

Manufacturing

Other Industry

Services

FOCUSECONOMICS


April 2015

Notes and Statements

DISCLOSURE STATEMENT

The FocusEconomics Consensus Forecast Eastern Europe (“Forecast”) is based on information obtained from sources believed to be reliable. FocusEconomics and the participating panelists (“Information Providers”) do not guarantee that the information supplied in the Forecast is accurate, complete or timely. The Information Providers do not make any warranties with regard to the results obtained from the Forecast. The Information Providers are not responsible for any errors or omissions, or for any injuries or damages resulting from the use of this information, including incidental and consequential damages. Recipients should not regard the Forecast as a substitute for the exercise of their own judgement. The recommendations made in the Forecast may be unsuitable for investors depending on their specific investment objectives and financial position. The Forecast has been prepared solely for informational purposes and is not a solicitation of any transaction or an offer to enter into any transaction. Any opinions expressed in this report are subject to change without notice and the Information Providers are under no obligation to update the information contained herein.

PUBLICATION NOTE Consensus forecasts are mean averages of projections of economic forecasters surveyed by FocusEconomics for our monthly publication. Quarterly averages may not correspond to the annual figures due to different forecast panels.

The GDP-weighted averages for the regional aggregates refer to economies surveyed by FocusEconomics on a monthly basis, and include the following countries:

G7 (Group of Seven, 7 countries): Canada, Japan, United Kingdom and United States; France, Germany and Italy are also Euro area countries.Euro area (19 countries): Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Portugal, Slovakia, Slovenia, and Spain.Nordic Economies (5 countries): Denmark, Norway, Sweden and Iceland. Finland is also a Euro area member.Eastern Europe (14 countries): Bulgaria, Croatia, Czech Republic, Hungary, Latvia, Lithuania, Poland, Romania, Russia, Turkey and Ukraine; Estonia, Latvia, Slovakia and Slovenia are also Euro area members.MENA (Middle East and North Africa, 16 countries): Algeria, Bahrain, Egypt, Iran, Iraq, Israel, Jordan, Kuwait, Lebanon, Morocco, Oman, Qatar, Saudi Arabia, Tunisia, United Arab Emirates and Yemen.Asia-Pacific (17 countries): Australia, Brunei, Cambodia, China, Hong Kong, India, Indonesia, Korea, Laos, Malaysia, Myanmar, New Zealand, Philippines, Singapore, Taiwan, Thailand and Vietnam.Latin America (23 countries): Argentina, Belize, Bolivia, Brazil, Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, El Salvador, Guatemala, Haiti, Honduras, Jamaica, Mexico, Nicaragua, Panama, Paraguay, Peru, Puero Rico, Trinidad and Tobago, Uruguay and Venezuela.Additional Countries: Switzerland and South Africa.

Weights are based on market exchange rates and reflect the latest forecasts on GDP growth, inflation and exchange rates.

BRIC (4 countries): Brazil, Russia, India, and China. The term was coined by Goldman Sachs in November 2001 and has since been widely adopted in investment and finance.COPYRIGHT NOTE © Copyright 2015 FocusEconomics S.L. Duplication, reproduction, transmission, publication or redistribution in any form or by any means electronic, mechanical, or otherwise without prior written consent of FocusEconomics S.L. is strictly prohibited. Please cite source when quoting. All rights reserved under International Copyright Conventions.

The FocusEconomics Consensus Forecast Eastern Europe is a monthly publication of FocusEconomics. Communications to the Editor or FocusEconomics in general should be addressed as follows:

FocusEconomics S.L.Gran Via 657, E-08010 Barcelona, SpainE-mail: [email protected]

Notes

ASIA PACIFIC |

CENTRAL AMERICA |& CARIBBEAN |

EASTERN EUROPE|

EURO AREA |

LATIN AMERICA|

MAJOR ECONOMIES |

MIDDLE EAST| & NORTH AFRICA|

NORDIC ECONOMIES|

Brunei, China, Cambodia, Hong Kong, India, Indonesia, Korea, Laos, Malaysia, Myanmar, Philippines, Singapore, Taiwan, Thailand, Vietnam, Australia & New Zealand

Belize, Costa Rica, Dominican Republic, El Salvador, Guatemala, Haiti, Honduras, Jamaica, Nicaragua, Panama, Puerto Rico and Trinidad & Tobago

Bulgaria, Croatia, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Russia, Slovakia, Slovenia, Turkey & Ukraine

Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Portugal, Slovakia, Slovenia & Spain

Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, Mexico, Paraguay, Peru, Uruguay & Venezuela

G7 countries (United States, Canada, Japan, United Kingdom, France, Eurozone, Germany & Italy); BRIC overview (Brazil, Russia, India & China); Switzerland

Algeria, Bahrain, Egypt, Iran, Iraq, Israel, Jordan, Kuwait, Lebanon, Morocco, Oman, Qatar, Saudi Arabia, Tunisia, United Arab Emirates, Yemen; South Africa

Denmark, Finland, Iceland, Norway and Sweden

FocusEconomics Consensus Forecast reports cover economic forecasts for over 1,600 unique indicators in 95 countries. Every monthly report includes the Consensus Forecast for each indicator covered. The Consensus Forecast, based on an average of the forecasts provided by the most reputable economic research authorities in the world, is the one number you can rely on to make important business decisions.

REGIONS & COUNTRIES COVERED

WHY CHOOSE FOCUSECONOMICSInstantly diversify your intelligence portfolio with dozens of forecasts.

Get just the information you need, all in one place.

Streamline research efforts by utilizing our comprehensive survey of leading economists.

Prepare for what may occur next by studying how forecasts have evolved over time.

Gain key insight into political and economic developments in a country or region to assess the potential impact on business prospects.

REDUCE RISK

SAVE TIME

OPTIMIZE RESEARCH

ANALYZE TRENDS

ANTICIPATE DEVELOPMENTS

REAL SECTOR GDP per capita Economic Growth Consumption Investment Industrial Production Unemployment Rate Fiscal Balance Public Debt

EXTERNAL SECTORCurrent Account Trade BalanceExportsImportsInternational ReservesExternal Debt

MONETARY & FINANCIAL SECTORMoneyInflation Rate Policy Interest Rate Exchange Rate

FocusEconomics | Gran Via 657, 08010, Barcelona, Spain | +34 932 651 040 | [email protected] | www.focus-economics.com

INDICATORS INCLUDED

CONSENSUS FORECAST - FocusEconomics...April 2015 Summary REAL SECTOR | Ukraine’s crisis and...

Documents

Transcript of CONSENSUS FORECAST - FocusEconomics...April 2015 Summary REAL SECTOR | Ukraine’s crisis and...