Southeastern Europe & Mediterranean Emerging Market Economies: Bi-Weekly Report 10 - 23 June 2025

CYPRUS
Following a strong start to the year, GDP growth is set to remain resilient and broad-based over the forecast horizon, at 2.9%, despite headwinds, including from global trade uncertainties and geopolitical unrest in the Middle-East
Robust growth in fixed investment should compensate for moderating growth in private consumption and weak net exports
Considerable downside risks, primarily related to the evolution of external conditions, dominate the outlook, however

NORTH MACEDONIA
Despite external headwinds, GDP growth should hover only slightly below its long-term potential rate of c. 3.0% over the medium-term, buoyed by strong (and more balanced) domestic demand
Risks to this outlook are largely tilted to the downside, including from an escalation of global trade uncertainties and/or resurgence of energy-induced inflation
Worryingly, the political factor has, once again, come to the forefront

EGYPT
With disinflation on track, the CBE has embarked on a monetary easing cycle -- for first time since 2020 -- but at a cautious pace, given broad-based uncertainty
Despite the envisaged slow disinflation process and risks related to geopolitical uncertainty, the CBE has significant room to continue cutting rates

APPENDIX:
DETAILED MACROECONOMIC DATA
REGIONAL SNAPSHOT:  
        MACROECONOMIC INDICATORS
        FINANCIAL MARKETS