Lithuanian budget projected to boost the consumption.
Czech Republic grows in Q2’2015.
Social gas quota introduced in Ukraine.
Hungarian Paksi nuclear plant will be upgraded.
Lithuanian Finance Minister Rimantas Šadžius revealed the details of 2016 budget. He says it was drafted in a way that will boost the domestic consumption. So the spending would expand by 6.7 per cent (compared with 2015 spending) and it would reach EUR8485bn. The ministry plans to increase the minimum wage (to EUR350 starting from January 1st, 2016), as well as public sector salaries. Also the non-taxable income tax threshold will grow. Increase in the military expenditures is also planned. The defence budget will expand by 35.2 per cent y/y. The total expenditure on defence is expected to reach EUR574m. Lithuanian economy slows down. Budget revenues are declining in 2016 and will drop by 13.6 per cent (EUR317m) to EUR7,893bn. The GDP deficit is planned up to EUR592m (which is 45.1 per cent above the 2015 deficit).
On the other hand, the Czech economy is growing even faster than expected. The Czech Statistical Office reported that Czech economy grew in the second quarter of 2015 by 4.6 per cent y/y while it was supposed to grow by 4.4 per cent. The growth Q2 to Q1 2015 stood at 1.1 per cent level. Czech economy is expanding at the fastest pace since the 2007. The GDP is strong, unemployment rate and public debt are low. The unemployment rate is 6.2 per cent, while in the EU overall it’s 9.5 per cent.
Ukrainian government would spend approx. UAH5.6bn to refund gas usage of its citizens. Prime Minister Arsaniy Yatseniuk informed that each household will be reimbursed for buying 200 cubic meters of natural gas (the refund will be 50 per cent of the price). The Interfax cites PM Yatseniuk: „Today, the Cabinet of Ministers acting within its authority as provided by laws is taking a decision to provide a social quota of 200 cubic meters of gas at a price of UAH 3,600 to every Ukrainian citizen, which is twice lower than the market price of natural gas”. It means the government will compensate the difference in price at the expense of budget funds. Ukraine is a major gas consumer. The share of households’ consumption in total domestic consumption is 30 per cent. Total household gas use reached 15bn cubic meters in 2014.
Hungary and EU agreed on terms and conditions of upgrading Hungarian nuclear plant, Paksi. Hungarian cabinet chief János Lázár and Commissioner for Competition Margrethe Vestager concluded a specific plan of the process. While visiting Brussels, Lázár also met with Directorate-General for Energy Dominique Ristori. They both reviewed the licensing procedure for the Paksi upgrade, as the permission from the EC is required. Paksi Nuclear Power Plant is located in the central Hungary and is the only operating nuclear power plant in the country. It consists four reactors and produces almost half of the total electrical power that the country generates (yearly). It was built in the period 1967-1982. With the plans of its expansion Paksi became in 2012 one of the „high priority projects of the national economy”. The two new reactors are to be completed by 2023.
On the edge of violating Schengen
The fences of the Hungary is the bone of the contention between Victor Orban and European officials (and publicists). European Commission has warned the country that building a fence along the border with Slovenia would violate the rules of Schengen Agreement. It is said that EU migration commissioner Dimitris Avramopoulos discussed the issue with Hungarian Interior Minister Sandor Pinter last week and remind him about the article 20 of the Schengen code that states: “Internal borders may be crossed at any point without a border check on persons, irrespective of their nationality, being carried out.” After finishing the razor-wire fence along its border with Serbia, Hungary plans to build the same one along its borders with Croatia and Romania. It has also built a temporary fence on the border with Slovenia.
What’s up in indexes?
It was the second time in September’15 when UX index of Ukrainian stock exchange grew. The day passed with positive dynamics and so are the prospects for today.
BUX index (of the Budapest Stock Exchange) dropped by 0.19 per cent to 20893,96 index points on Wednesday. On Tuesday it was 20932,82 index points. And it is up 25.61 per cent from year-end.
BET (of Bucharest) ended down on Wednesday with 6981,62 index points. The day before it was 7056,34 index points. So the drop was 1.06 per cent. And it dropped by 1.43 per cent by year-end.
PX (of Prague) increased by 1.22 per cent to 971,10 index points (from 959,37 index points on Tuesday). From year-end it is up 2.58 per cent.
WIG20 (of Warsaw) also increased on Wednesday – by 1.14 per cent (to 2066,37 index points). On Tuesday it was 2043,00 index points. But it’s still down from year-end (10.78 per cent drop).
OMXT (of Tallinn) ended down with 863,21 index points. On Tuesday it was 869,96 index points. So the drop was 0.78 per cent. But it grows constantly from year-end – it increased 14.32 per cent till now.
OMXV (of Vilnius) was up 0.35 per cent. On Wednesday the index’s result was 478,82 index points while the day before it was 478,14 index points. From year-end it increased by 6.06 per cent.
SAX (of Bratislava) stood still on Wednesday with 0 per cent change. It ended with 268,87 index points and that’s a 20.94 per cent growth from year-end.
UX (of Ukraine) increased by 2.36 per cent yesterday ending with 872,35 index points (compared with 852,22 index points on Tuesday). From year-end it dropped by 15.88 per cent.