Is a war in Taiwan likely?

CHINA ADVISORY · Report · 14 Jun 2022

President Biden’s public support for the defense of Taiwan, coupled with China’s increasing aggressive tactics in the South China Sea, have increased concerns about an invasion of Taiwan by the PRC. Elections in both Taiwan and the U.S. in 2024 could exacerbate existing tension. Despite the growi...

Castillo makes last-ditch efforts, as economy slows

PERU · Report · 14 Jun 2022 · 1 response

In this report we discuss the political and economic outlook for Peru. On politics, we argue that President Pedro Castillo is walking a tightrope, and that the probability of his being ousted has increased substantially. In previous reports, we have argued that the preliminary investigation into ...

First quarter IMF review approved - what's next?

ARGENTINA · Report · 14 Jun 2022

Last Wednesday, the IMF announced, as might have been expected, that the IMF and Argentina's authorities reached a staff level agreement in the country's first quarterly review (corresponding to 1Q22). Upon completion of the review (i.e., once the IMF board approves the review), Argentina should ...

Inflation falls due to energy price freezes and tighter monetary policy

DOMINICAN REPUBLIC · Report · 14 Jun 2022

After a strong 1% rise in April, monthly inflation fell 0.5% in May, one of its lowest levels since September 2020. But there was no free lunch: the Dominican government has maintained its fuel subsidy plan during the first five months of 2022, thereby providing a subsidy of $318.4 million to mi...

Politics: Morena wins 4 of 6 governors’ races, albeit under complicating circumstances

MEXICO · Report · 13 Jun 2022

When the dust settled on June 5, in the six state gubernatorial races up for grabs, Morena won four of the races. This brings the number of the country’s 32 states governed by the party to 20 (22 including its allies). Predictably, AMLO’s party was awash in triumphalism. But the victories occurre...

Economics: The export sector is driving Mexico's economic recovery

MEXICO · Report · 13 Jun 2022

The export sector has been the only one to maintain considerable growth and momentum in the past few years. Indeed, its growth has triggered the (still insufficient) recovery of the Mexican economy. Exports of agricultural and food products maintained their growth in the most complicated months o...

EURHUF at record high today

HUNGARY · In Brief · 13 Jun 2022

The forint weakened to EURHUF 402, a historic record, today, before settling down at a bit stronger level but still north of the 400 line. Immediately it was about the global stockmarket selldown and the strong dollar, fundamentally it was about everything from the war impact to rising inflation,...

The reminiscence vote for former President Lula and other weekly topics

BRAZIL POLITICS · Report · 13 Jun 2022

The Senate may vote on proposals related to the ICMS tax on fuel, electricity, transportation and telecommunications. The Corpus Christi holiday may affect the pace of voting in the National Congress. In terms of the economy, the Central Bank's decision on interest rates stands out. This week'...

Consumer confidence improves modestly, trade point point to steady growth; all supportive of steady monetary tightening

ISRAEL · In Brief · 13 Jun 2022

Consumer confidence (CBS) improved in May to -14 points from -17 in April. This is the highest print in 2022. The future expectations components, both on the personal level and regarding the economy as a whole improved in May, while the current situation component remained stable. This improved c...

Thursday is a national holiday, the Senate may vote on three proposals relating to the fuels issue, and the Copom will meet to decide on the interest rate

BRAZIL POLITICS · Report · 13 Jun 2022

Thursday's holiday may reduce the pace of activity in the National Congress, especially in the House. There are three proposals on the fuels issue in the Senate: one on essential services and the ICMS tax, another on the competitiveness of biofuels, and a third on federal reimbursements to lower ...

It won’t be easy for foreign firms to leave China

CHINA FINANCIAL · Report · 13 Jun 2022 · 1 response

Special points to highlight in this issue: * The Chinese trade surplus in May was by far the largest trade surplus ever recorded by China for that month. For the first five months of the year China’s trade surplus was 42 percent greater than during the same period last year. Last year’s trade...

Disputed taxes and their implications for the measured fiscal situation

INDIA · Report · 13 Jun 2022

In this report, we show a weakness of conventional fiscal data. Many times, it appears that taxes are paid by a private person, but simultaneously litigated. The stock of this litigation has risen to economically significant values. Alongside this, there is evidence that the win rate for the gove...

Conditions support steady aggressive tightening

ISRAEL · Report · 13 Jun 2022

• Recent economic indicators point to fairly robust growth and steady business sector optimism. • We expect May’s CPI to reach 0.8% m/m, at the high end of consensus. • Conditions support steady monetary tightening in the coming year (0.5% at next rate decision on July 4th), to 2.75% one yea...

The pendulum has (already) swung

UKRAINE · In Brief · 13 Jun 2022

Over the recent weeks military experts and journalists have suddenly turned quite optimistic on developments at the front. Fights are still extremely tough, and casualties on Ukrainian side are very high. Nevertheless, all people following the military actions closely have become positive after m...

Off into a crucial poll-free week

COLOMBIA · In Brief · 12 Jun 2022