EETP-2017年Q4欧盟成员国及潜在成员国经济报告（英文）-2018.1-48页-1mb

Summary of EU Candidate & Potential Candidate Countries’ Economic Quarterly (CCEQ) - 4th Quarter 2017

Core Content

This report provides an overview of the economic developments in the Western Balkans and Turkey during the fourth quarter of 2017, focusing on GDP growth, employment trends, inflation, trade balances, fiscal policy, and financial sector performance.

Main Economic Trends

GDP Growth

• Western Balkans: The region's real GDP growth reached 2.5% in Q3 2017, up from 2.1% in Q2 2017 and 2.8% in the same quarter of 2016.
• Albania: GDP growth slowed to 3.5% y-o-y, down from 4.0% in Q1 and 4.1% in Q2.
• The former Yugoslav Republic of Macedonia: GDP growth returned to 0.2% y-o-y after a contraction in the previous quarter.
• Serbia: GDP growth accelerated to 2.1% y-o-y, driven by investment and household consumption.
• Bosnia and Herzegovina: Growth remained at 2.9% y-o-y.
• Montenegro: Growth was robust at 4.7% y-o-y.
• Kosovo: Annual output growth remained at 4.4% y-o-y.
• Turkey: Annual GDP growth reached 9.6% in Q3, mainly due to strong investment and recovery in household consumption.

Employment and Unemployment

• Western Balkans: Annual employment growth slowed significantly, with the average job growth rate dropping to 2.5% from 4.3% in Q2.
• Albania: Unemployment rate decreased to 14.0% from 14.2% in the previous quarter.
• The former Yugoslav Republic of Macedonia: Unemployment rate fell to 22.1% from 22.2%.
• Serbia: Unemployment increased to 12.9% from 11.8%, due to higher participation rates and lower informal employment.
• Turkey: Unemployment rate dropped to 10.7% from 11.0% in the previous quarter.

Inflation

• Western Balkans: Inflation remained low, with most countries below the 3% target, except for Serbia and Montenegro.
• Serbia: Annual CPI inflation reached 3%, the midpoint of the tolerance band.
• Montenegro: CPI inflation rose to 3.0% in December.
• Turkey: CPI inflation decelerated to 11.9%, still significantly above the 5% target.
• Albania: CPI inflation was at 1.8% in December, below the central bank's target.

Trade and Current Account

• Trade Deficits: Remain high across the Western Balkans, ranging from 12% of GDP in Serbia to 42% in Montenegro and Kosovo.
• Current Account Deficit: Narrowed in all countries except Serbia. In the fourth quarter, the deficit was at 6.3% of GDP.
• Net Exports: Continued to subtract from GDP growth due to the large trade deficit.
• Services Balance: Improved in the third quarter, particularly in transport, travel, and other services, but offset by a higher trade deficit.
• FDI: Net FDI in the Western Balkans was more than double the current account deficit.

Fiscal Developments

• Fiscal Consolidation: Progress slowed in some countries, with Albania and Serbia still facing high public debt levels.
• Albania: Public debt ratio was at 69.7% of GDP in the first eleven months of 2017, with the deficit target set at 2.0% of GDP.
• Serbia: The central government recorded a 2.1% budget surplus in 2017.
• Turkey: General government debt decreased from 28.7% to 28.2% of GDP in the third quarter, with a projected 28.2% by the end of 2017.
• 2018 Budget: Both planned revenues and expenditures are expected to increase by 4.9% to 28% and 30% of GDP, respectively, with the budget deficit targeted at 2% of GDP.

Financial Sector

• Credit Growth: Credit to the economy showed positive growth in some countries, but was subdued in unadjusted terms.
• Albania: Credit growth to the private sector improved from 2.6% to 3.1% y-o-y, with a decline in foreign-currency loans.
• Non-Performing Loans (NPLs): NPL ratios decreased in most countries, with Albania recording 14.3% in November, down from 20.4% in November 2016.
• Capital Adequacy Ratio: Remained strong at 16.4% in the third quarter.

Key Developments

• Albania: Parliament approved a second revision of the 2017 state budget, keeping the deficit target at 2.0% of GDP.
• IMF Consultations: The IMF emphasized the need for continued reform efforts in Albania to enhance growth potential and financial stability.
• World Bank Report: Albania's ranking in the Doing Business 2018 Report declined to 65th from 58th in the previous report.

Conclusion

The Western Balkans experienced continued economic recovery in 2017, with GDP growth and employment improvements, although challenges such as high trade deficits and macroeconomic imbalances persist. Turkey showed strong GDP growth but faced significant inflationary pressures. Fiscal consolidation efforts varied across the region, with some countries still struggling with high public debt. The financial sector showed signs of improvement, particularly in reducing NPL ratios and maintaining capital adequacy. Overall, the region's economic performance was influenced by external demand and domestic policy measures.