In Brief
Consumer price inflation seen stable at 40-yr low Greek consumer price inflation in February is seen stable at a 1.8 percent annual rate, a 40-year low hit in the previous month on cooling food and energy prices, analysts said yesterday. The median forecast emerging from a poll of four analysts indicated February should show a halt in the rapid decline in inflation which has taken the headline rate down from a 10-year high of 4.9 percent last year. The resilience of core inflation amid structural rigidities in the economy may have helped keep inflation steady despite falling commodity prices and more aggressive winter sales. However, economists expect the decline to resume in following months due to a worsening economy and a sharp increase in energy prices in the same period of last year. «Favorable base effects on headline inflation from energy prices and weaker domestic demand are expected to drive CPI inflation in the vicinity of 1.5 percent during the first half of 2009,» Nikos Magginas, an economist at the National Bank, said. (Reuters) Greek lenders may need 4 billion euros for CEE European banks exposed to Central and Eastern Europe (CEE) could require additional capital of 32 billion to 40 billion euros by 2010, due to «stressed» nonperforming loan and loss ratios, J.P. Morgan Securities said. The brokerage said Nordic banks could need about 8 billion euros of additional capital, while Austrian banks could require 5 billion euros. The requirement for Greek banks was estimated at 4 billion euros. Though nonperforming loan ratios are not expected to hit the previous crisis peaks of 20 percent to 40 percent, JP Morgan placed its estimate at 10 percent to 30 percent. Loss ratios – bad loans as a percentage of total credit – are expected to be at 75 percent for the region. (Reuters) Cosmote deal Greece’s largest mobile phone company, Cosmote, announced yesterday that it has signed an agreement to increase its stake in Albanian Mobile Communication (AMC) by 12.6 percent, rubber-stamping a deal that had been announced last month. Cosmote, the mobile arm of OTE telecom, purchased the stake for 48.2 million euros from the Albanian government, boosting its holding in AMC to 95 percent. Albanian finance Albania will ask Deutsche Bank and Alpha Bank, who have offered to fund 60 percent of a syndicated loan of 250 to 300 million euros, to get Raiffeisen and Credit Suisse to provide the rest. Albania wanted to borrow to realize its public investments program ahead of its June 28 general elections and ward off the effects of the global financial and economic crisis. A total of seven international banks presented their offers. (Reuters) Bulgarian currency Bulgaria will seek to join the exchange rate mechanism later this year once inflation subsides, central bank Governor Ivan Iskrov said. Iskrov estimated Bulgaria’s inflation rate at 2.5 percent at the end of this year, which will enable the country to resume talks to join the mechanism, a two-year currency stability test before euro adoption. «The moment inflation subsides, and this will happen this year, we will take further steps to continue this process,» Iskrov said at an economic conference in Sofia today. (Bloomberg)
