News round-up

9 - 15 March 1998


Czech Republic: Ivan Pilip, the Finance Minister, said that for 1999, the Ministry is planning a balanced budget of 568.4 billion crowns (US$16.52 billion) against this year's adjusted budget of 542 billion crowns.

The Consumer Price Index (CPI) rose by 0.6 per cent in February from January, and by 13.4 per cent from the same period of 1997.

Estonia: the Ministry of Finance projects a six per cent growth in the Gross Domestic Product (GDP) in 1998, and an eight to 8.5 per cent increase in the CPI. CPI rose by one per cent in February over the January figure. The Ministry also confirmed an estimated 9.5 per cent growth of GDP in 1997.

Hungary: the CPI rose 1.7 per cent in February, over the January figure. Peter Medgyessy, the Finance Minister, said that he expects the annual inflation rate to fall to 16 per cent in March.

The government is considering spending some $17 million to revamp its internal communication network, a change which could mean replacing Matav as the telecommunication provider for some ministries and government departments.

Latvia: according to the Central Statistical Office, the CPI in Latvia rose 0.2 per cent in February over January, and 6.1 per cent over the same period of 1996.

Lithuania: CPI rose 0.5 per cent in February from January and 6.4 per cent from the same period last year, reported the Government's Statistical Department.

Poland: the Government Centre of Strategic Studies reported a 1.3 per cent raise in the CPI in February over January's 3.2 per cent.

The National Bank of Poland (NBP) said that the money supply went up 1.8 per cent in February and amounted to 178.01 billion zloty ($51.152 billion) at the end of the month. The NBP could lower its interest rates by one or two percentage points in the second quarter of 1998, but this will only be possible provided that credits for the non-financial sector are brought down to 27 per cent, said Hanna Gronkiewicz-Waltz, the NBP's President.

Russia: Victor Chernomyrdin, Russian Prime Minister, addressed his appeal to the US Vice-President, Al Gore, to lift all restrictions on Russian exports. The move aimed to stimulate Russia's manufacturing sector and to bring Russian goods to the American market.

On 8 March, Gazprom, Russia's gas monopoly, provided Ukraine with the strict terms for repaying $900 million in overdue debts for natural gas supplies. Ukraine had expected to pay some $150 million this year to Gazprom for debt servicing, on top of $750 million owned for the gas supplies. Ukraine's authorities refused the possibilities of the debt-for-equity arrangements proposed by Russia.

Slovenia: according to the National Employment Office, from January 1997 unemployment in Slovenia rose by 3.1 per cent.

CPI rose by 0.9 per cent over January's figures, the National Statistical Office reported.


Estonia: Hoiupank Bank reported a net profit of 8.7 million kroons in February, on the total assets of 9,545.2 million kroons ($649.3 million).

Latvia: Rietumu Banka, the third largest Latvian bank, reported a profit of 1.516 million lats ($2.5 million), for the first two months of 1998, on the capital of 19.301 million lats.


Poland: the construction company, Mostostal Warszawa, has chosen Robert Fleming & Co as manager of its new share issue, which includes Global Depository Receipts (GDR) for foreign investors. The issue will comprise 4.35 million shares, of which four million will be offered in the form of GDRs abroad. The remaining shares will go to the company's officials in the form of 3,500 convertible bonds, worth 100 zloty ($28.6) each.

Ukraine: on 9 March, Ukraine made its second entry to the international bond markets this year, with its first Euro-denominated offering. The E500 million two year deal followed its DM750 million three year issue in February. The Euro-denominated issue offered a yield of 15.06 per cent at its re-offer price, and is managed by SBC Warburg Dillon Read, as a sole lead manager.


Czech Republic: the Czech government has privatised Investicni a Postovni Banka, the first of the country's biggest banks considered for privatisation. The sale of the 36 per cent stake went to Nomura, the Japanese investment bank, for $88 million. Nomura already owned five per cent of the bank.


Albania: a bomb, which exploded during the weekend of 8-9 March in Tirana, damaged the business centre which contains the offices of Deloitte & Touche. Deloitte & Touche audited the fraudulent pyramid finance schemes which collapsed last year. (FT 09/03/98)

Czech Republic: on 9 March the Czech Defence Minister, Michal Lubkowicz, said that he expects Parliament will ratify membership to the North Atlantic Treaty Organisation (NATO) before the general election in June, and that he does not consider the national referendum aiming to support the issue to be necessary.

Czech President, Vaclav Havel, had a three day official visit to Poland this week, aimed at strengthening the co-operation before the accession of three Central European countries to the European Union (EU) and NATO.

Hungary: the Hungarian Prime Minister, Gyula Horn, said that he hopes the coalition between his Socialist party and the liberal Free Democrats would continue, even if the Socialists, who at present are receiving about 40 per cent of supporting votes, won an absolute majority in the forthcoming general election in May.

Yugoslavia: western powers have agreed to impose an immediate arms, credits and visa sanctions on Yugoslavia. This follows the Serb crackdown on ethnic Albanians in the province of Kosovo, when at least 80 people were killed by security forces last week. The sanctions were supported by Russia, the biggest arms supplier to Yugoslavia. The socialist government of Slobodan Milosevic called for an open dialogue with the Albanian leadership on the future of Kosovo. (FT 10 and 12/03/98)

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