Please refer to important disclaimers on the final page of this document. Regional Fixed Income Market Watch Georgia, Armenia, Azerbaijan, Belarus, Kazakhstan, Ukraine Key macro indicators GDP, % change GDP, US$ bn GDP per capita, US$ Inflation, period average Fiscal balance, % of GDP Current account balance, % of GDP 2015A 2016F 2017F 2015A 2016F 2017F 2015A 2016F 2017F 2015A 2016F 2017F 2015A 2016F 2017F 2015A 2016F 2017F Armenia 3.0% 3.2% 3.4% 10.5 10.8 11.2 3,521 3,596 3,731 3.7% -0.5% 2.5% -4.8% -4.5% -3.0% -2.7% -2.5% -3.0% Azerbaijan 1.1% -2.4% 1.4% 54.0 35.7 38.5 5,739 3,759 4,028 4.0% 10.2% 8.5% -6.8% -9.9% -3.9% -0.4% 0.7% 3.1% Belarus -3.9% -3.0% -0.5% 54.6 48.1 49.5 5,749 5,092 5,266 13.5% 12.7% 12.0% -3.5% -5.3% -8.2% -3.8% -4.9% -4.8% Georgia 2.8% 3.4% 5.2% 14.0 14.5 15.7 3,754 3,908 4,254 4.0% 2.6% 3.6% -1.2% -1.9% -3.7% -11.7% -12.1% -12.0% Kazakhstan 1.2% -0.8% 0.6% 184.4 128.1 148.3 10,426 7,138 8,141 6.5% 13.1% 9.3% -6.8% -5.6% -4.1% -2.4% -2.2% 0.0% Ukraine -9.9% 1.5% 2.5% 90.5 87.2 95.3 2,125 2,052 2,247 48.7% 15.1% 11.0% -1.2% -3.7% -4.4% -0.3% -1.5% -2.1% Russia -3.7% -0.8% 1.1% 1,326.0 1,267.8 1,442.4 9,243 8,838 10,060 15.5% 7.2% 5.0% -3.5% -3.9% -1.5% 5.2% 3.0% 3.5% Turkey 4.0% 3.3% 3.0% 717.9 735.7 769.5 9,186 9,317 9,647 7.7% 8.4% 8.2% -1.0% -1.9% -1.6% -4.5% -4.4% -5.6% Source: IMF Sovereign credit ratings Monetary stance Fitch Moody’s S&P Inflation, y/y MPR LC FC Outlook LC FC Outlook LC FC Outlook Feb-17 Mar-17 Armenia B+ B+ stable B1 B1 stable NA NA NA Armenia -0.2% 6.00% Azerbaijan BB+ BB+ negative Ba1 Ba1 negative BB+ BB+ negative Azerbaijan 13.0% 15.00% Belarus B- B- stable Caa1 Caa1 stable B- B- stable Belarus 7.0% 15.00% Georgia BB- BB- stable Ba3 Ba3 stable BB- BB- stable Georgia 5.5% 6.75% Kazakhstan BBB BBB stable Baa3 Baa3 negative BBB- BBB- negative Kazakhstan 7.8% 11.00% Ukraine B- B- stable Caa3 Caa3 stable B- B- stable Ukraine 14.2% 14.00% Russia BBB- BBB- stable Ba1 Ba1 stable BBB- BB+ positive Russia 4.6% 9.75% Turkey BBB- BB+ stable Ba1 Ba1 negative BB+ BB negative Turkey 10.1% 8.00% Source: Fitch Ratings, S&P Global, Moody's Source: Central banks, Statistics Offices Highlights Inflation in the USA came in at 2.7% y/y in February 2017, up from 2.5% y/y in the previous month and well above the FED target rate. Following a 2.0% y/y increase in February 2017, inflation in the Euro zone retreated to 1.5% y/y in March 2017. Growth in Turkey and Russia came in at 3.5% y/y and 0.3% y/y, respectively, in 4Q16. According to short-term indicators, relatively strong growth continued in Armenia (+6.0% y/y), Georgia (+4.4% y/y), and Kazakhstan (+3.7% y/y) in February 2017. In Azerbaijan growth retreated to 0.4% y/y, while in Belarus GDP contracted 1.0% y/y in 2M17. In Ukraine growth likely weakened as industrial output turned negative (-4.6% y/y), agricultural output remained in negative territory, and construction production index increased marginally. Compared to the previous month, inflation in February 2017 increased in Ukraine (+14.2% y/y), Azerbaijan (+13.0% y/y), Turkey (+10.1% y/y), and Georgia (+5.5% y/y). Compared to the previous month, inflation in February 2017 was broadly flat in Kazakhstan (+7.8% y/y), while retreating in Russia (+4.6% y/y) and Belarus (+7.0% y/y). Armenia remained in deflationary territory, with prices down 0.2% y/y in February 2017. GDP growth rate, y/y Source: Central banks, Statistics Offices, Bloomberg Regional │ Fixed Income Monthly Bulletin April 4, 2017 -4% -2% 0% 2% 4% 6% 8% 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 USA Euro Zone China Russia Turkey
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Please refer to important disclaimers on the final page of this document.
Inflation in the USA came in at 2.7% y/y in February 2017, up from 2.5% y/y in the previous month and well above the FED target rate. Following a 2.0% y/y increase in February 2017, inflation in the Euro zone retreated to 1.5% y/y in March 2017.
Growth in Turkey and Russia came in at 3.5% y/y and 0.3% y/y, respectively, in 4Q16.
According to short-term indicators, relatively strong growth continued in Armenia (+6.0% y/y), Georgia (+4.4% y/y), and Kazakhstan (+3.7% y/y) in February 2017.
In Azerbaijan growth retreated to 0.4% y/y, while in Belarus GDP contracted 1.0% y/y in 2M17.
In Ukraine growth likely weakened as industrial output turned negative (-4.6% y/y), agricultural output remained in negative territory, and construction production index increased marginally.
Compared to the previous month, inflation in February 2017 increased in Ukraine (+14.2% y/y), Azerbaijan (+13.0% y/y), Turkey (+10.1% y/y), and Georgia (+5.5% y/y).
Compared to the previous month, inflation in February 2017 was broadly flat in Kazakhstan (+7.8% y/y), while retreating in Russia (+4.6% y/y) and Belarus (+7.0% y/y). Armenia remained in deflationary territory, with prices down 0.2% y/y in February 2017.
GDP growth rate, y/y
Source: Central banks, Statistics Offices, Bloomberg
Regional │ Fixed Income Monthly Bulletin
April 4, 2017
-4%
-2%
0%
2%
4%
6%
8%
3Q15 4Q15 1Q16 2Q16 3Q16 4Q16
USA Euro Zone China Russia Turkey
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Regional | Fixed Income Monthly Bulletin
April 4, 2017
Eurobonds
Regional currencies vs. US$
Source: Bloomberg Note: 1 US$ per local currency; Index growth means depreciation of the local currency, index decline means appreciation of the local currency; Aug-2014=100
Regional Eurobond balances, US$ bn Regional sovereign Eurobond spreads to UST, bps
Uz Rail Via Shortline US$ Industrial RAILUA Sep-21 9.88% CCC/CCC+/- 500 97.50 10.50 Dublin
Source: Bloomberg
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Regional | Fixed Income Monthly Bulletin
April 4, 2017
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