Overview and outlook

Growth is expected to pick up to 2.5% in 2017 from 2.2% in 2016 on higher oil and gas output and further expansion in the construction, financial services and transportation sectors.

A second consecutive, albeit narrowing, fiscal deficit is expected in 2017 (-5.1% of GDP), amid fiscal restraint and higher oil/gas revenues.

Public debt reached 67% of GDP in 2016 as the government ramped up bond issuance and expanded its demand for credit.

Private sector credit growth remains weak at 5% y/y in April.

Liquidity has improved with higher energy prices and bond issuance; bank deposit growth is outpacing credit growth.

The banking system is highly exposed to foreign funds (38% of total liabilities), a key concern in the current diplomatic crisis.

Borrowing costs are up, CDS spreads have widened, equities are down.

The currency is under pressure in the forwards market, but no de-peg.