Highlights

  • US economy increased by 2.3% y/y in 2017 after a 1.5% y/y growth in 2016.  Notably, US GDP growth in 4Q17 was at an annualized 2.6% y/y (advance estimate) after expanding 3.2% y/y in 3Q17. EU19 real GDP grew by 2.5% y/y in 2017. GDP growth in EU19 came in at 2.7% y/y in 4Q17 after a 2.8% y/y in 3Q17. China’s economy grew by 6.9% y/y in 2017. The growth was smooth through each quarter of 2017.
  • Based on rapid estimates, economic growth in 2017 was 7.7% y/y in Armenia, 5.2% y/y in Kazakhstan, 4.8% y/y in Georgia, 2.4% y/y in Belarus, 1.5% y/y in Russia, and 0.1% y/y in Azerbaijan (not available for Turkey and Ukraine yet).
  • Annual inflation in the US was down to 2.1% in December 2017 from 2.2% in the previous month. Based on the Eurostat flash estimate, annual inflation in EU19 was down to 1.3% in January 2018 from 1.4% in December 2017.
  • In January 2018, annual inflation decreased in Russia (2.2%), Georgia (4.3%), Kazakhstan (6.8%) and Turkey (10.4%) and increased in Armenia (2.7%). December 2017 figures indicate a decrease in annual inflation to 4.6% in Belarus and 7.8% in Azerbaijan and an increase to 13.7% in Ukraine.
  • In January 2018, in response to increased inflation expectations, the Ukrainian central bank raised monetary policy rate further to 16.0%, while the Kazakhstan central bank lowered its key rate to 9.75% as inflation was within 5-7% target range. The policy rate has remained unchanged in other countries.
  • Fitch upgraded credit rating of Belarus to B from B- and the outlook to stable from positive, Moody’s and S&P revised the Russia’s outlook to positive from stable, and Fitch and S&P revised the outlook for Azerbaijan to stable from negative.

Please see the full report for detailed coverage of the fixed income markets of Georgia, Armenia, Azerbaijan, Belarus, Kazakhstan, and Ukraine.