In Central-Eastern Europe, the economic indicators published in the monthly report Intesa Sanpaolo confirm a stabilization of the recovery path during the fourth quarter of 2015. However, some large differences persist between the countries taken into consideration. Industrial production and exports accelerated in November in Slovakia, Hungary and Croatia, slowing instead in Slovenia, Romania and Serbia. Confidence indicators are affected by the global economy in December, partly due to the turbulence that occurred in the international financial markets, however marking a marked improvement in the region in January. Growth was also supported by the fact that the markets considered were only marginally affected by the slowdown of the economic dynamics in the main developing countries. According to analysts, in the fourth quarter of 2015 a negative rate of GDP growth is expected in Russia.
Due to the drop in energy prices, inflation rates in December were negative in almost all countries in the region, with the only exceptions of Hungary (+0,9% due to base effect), Albania (+2,2%) and Serbia (+1,5%). Inflation has eased slightly in CIS markets, partly due to currency devaluation.
In the last meeting, the ECB has decided to keep key rates unchanged, confirming that they will remain at or below current levels for an extended period of time. This move implies further support measures in addition to the occurrence of negative or very low inflation rates nationwide, and at the same time the extension of the accommodative economic policy measures. In this context, long-term rates, after a general fall in the autumn following the peaks in the summer, remained substantially unchanged. On the other hand, in the CIS countries, and in particular in Russia, due to the depreciation of the currency that occurred in January, the new lows in oil prices and the related inflation risks, the banking authorities remained cautious . While Ukraine expects to receive the third tranche of IMF loan in February.
From a banking point of view, Loan growth improved slightly in some markets in November, notably Slovakia and Serbia, but continued to decline in Slovenia, Hungary, Croatia and Albania. In the CIS countries, net of the exchange rate effect, loans were still negative in Ukraine and Russia, where the increase in non-performing loans is the main source of concern. On the collection side, the increase in foreign liabilities, especially in Albania and Slovenia, was partially offset by the growth in deposits, which continued to grow, especially in Bosnia and Romania.
