MGI Weekly round-up | 15 December 2017
Stories MGI has been tracking this week:
- Energy companies are looking for oil in Eastern Med
- The current account deficit and inflation drop in Egypt
- Italian bonds and stocks under pressure amid election news
And as always, we feature content from the MGI data and analysis platform, a summary of the week’s key statistical releases, and a look to the week ahead in data. This week, we use the MGI platform (WB section) to examine the historical evolution of the current account balance (% of GDP) in Egypt.
Energy companies are looking for oil in Eastern Med
Israel’s Energy Ministry on Monday granted preliminary approval to bids from Greek and Indian energy companies to explore for oil and gas in the Eastern Med. Israel has received offers from Energean of Greece and a group of Indian companies such as ONGC Videsh, Bharat PetroklResources, Indian Oil Corp and Oil India. According to the ministry, the Greek company will be licensed to explore five offshore blocks while the Indian group will get permission for a block.
The current account deficit and inflation drop in Egypt
According to a press release issued by the Central Bank of Egypt, the country's current account deficit fell by 65.7% YoY in the first quarter of the financial year 2017/18 – to just $1.6 billion. The trade deficit fell by 5% – to $48.9 billion from $9.4 billion last year – due to an increase in exports, while the services balance doubled to $2.8 billion. The investment income balance registered a deficit of $1.5 billion. Specifically, investment income payments amounted to $1.7 billion – of which more than half were profits transfers from oil and non-oil companies operating in the country – while investment revenue amounted to approximately $230 million. Finally, net transfers increased by approximately 37%, mainly due to the increase in workers’ remittances.
In addition, during the last month, inflation reached its lowest value since December 2016. Inflation increased significantly after the country floated its currency in November 2016, reaching a peak of 33% in July 2017. In November 2017 consumer prices increased by 26% compared to 30.8% in October 2017, while core of inflation fell to 25.5% from 30.5%. According to the country's Finance Minister, inflation is expected to reach 20% by January and 13%-14% in August of next year.
Italian bonds and stocks under pressure amid election news
Italy's government debt and equity markets were under pressure on Wednesday after news that the country will hold general elections in March next year. Italy’s 10-year bond yields increased by almost 9 basis points to 1.79% (its highest level in about two weeks) while the premium paid by investors for Italian versus German debt rose as well.
The country’s index of bank stocks decreased by 2.7% with BPER Banca, UBI Banca, Banco BPM and Unicredit shares falling between 3.9% and 6%. Milan’s FTSE MIB index – made up of the 40 most liquid and capitalized shares on the Borsa Italiana – declined by about 1%, showing worse performance than the larger pan-European Stoxx index, which dropped by only 0.1%, Reuters reports.
National election in Italy must be held by May 2018 due to the end of the current five-year parliamentary term.
Featured content from the MGI data and analysis portal
In this newsletter, we use the WB section of the MGI platform to look at the current account balance (as % of GDP) in Egypt. The current account is one of the two components of a country's balance of payments and consists of the trade balance, net primary income and net cash transfers. The period under review is 1980-2015.
Egypt's current account was negative for most of the period under consideration, except for several years in the early 1990s and the 2002-2007 period. The indicator reached a record low of -9.1% in 1981 and climbed to a peak of 9.1% in 1991. Since 2005 it has displayed a negative trend, reaching a level of -5% in 2015. The country’s current account deficit as a percentage of GDP is expected to decline in coming years.
The week in data
Highlights from national statistics releases tracked by MGI this week include:
- Turkey’s real GDP grew 11.1% in the 3rd quarter of 2017 compared to the 3rd quarter of 2016
- Albania's CPI increased 1.7% (YoY) in November 2017
- Montenegro's CPI increased 2.4% (YoY) in November 2017
- Payroll employment in France increased 0.2% QoQ and 1.1% YoY in 2017Q3
- Italy's IPI in October 2017 increased 0.5% over the previous month (seasonally-adjusted data)
- Spain's CPI increased 1.7% YoY in November 2017 (final estimate)
- Employment in Greece increased 0.9% QoQ and 2.3% YoY in 2017Q3. Unemployment rate stood at 20.2% (-0.9% compared to 2017Q2)
- Consumer prices in France increased 1.2% YoY in November 2017 (final estimate)
In the coming week, we expect data for employment/unemployment, inflation and business and consumer confidence for several Mediterranean countries. MGI’s complete data release schedule can be viewed at our release calendar section.
Monday 18 December, 2017:
- Italy balance of trade for October
- Israel inflation expectations for December
- Albania balance of trade for November
- France 3-month, 6-month and 12-month BTF auction
- Montenegro unemployment rate and employment for 2017Q3
- Slovenia unemployment rate and employment for 2017Q3, detailed data
- Slovenia employment (register data) for October
Tuesday 19 December, 2017:
- Italy current account for October
- Morocco central bank interest rate decision
Wednesday 20 December, 2017:
- Palestinian Territories current account for 2017Q3
- Albania central bank interest rate decision
- Turkey central government debt for November
Thursday 21 December, 2017:
- Palestinian Territories balance of trade for October
- Turkey consumer confidence for December
- France business confidence for December
- Lebanon inflation rate for November
- Spain industrial orders for October
- Greece current account for October
- Slovenia consumer confidence for December and PPI for November
- Slovenia employment (detailed register data) for October
- Israel IPI for October
- Israel unemployment rate and employment for November
- Malta inflation rate for November
Friday 22 December, 2017:
- France real GDP for 2017Q3, detailed data
- France household consumption expenditure and PPI for November
- Spain PPI for November and balance of trade for October
- Italy consumer and business confidence for December
- Italy industrial orders and industrial sales for October
- Morocco inflation rate for November
- Slovenia business confidence for December and tourist arrivals for October
- Croatia unemployment rate (register data) for November
- Croatia unemployment rate and employment for 2017Q3
- Malta unemployment rate and employment for 2017Q3
- Montenegro real GDP for 2017Q3
- Tunisia PPI for October
- Israel central bank interest rate decision