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COUNTRY INSIGHTS

The economy may have bottomed in April-May
RUSSIA ECONOMICS · In Brief · 16 Jun 2020

Rosstat reported that industrial production decreased in May and 5m20 by 9.6% and 2.4% y-o-y. In the mining sector respective figures stood at -13.5% and -3.4% y-o-y, while in manufacturing it was not that deep (-7.2% and -1.4% y-o-y respectively). Note that in April contraction in manufacturing ...

Ruble sovereigns: Еxisting market capacity not very large
RUSSIA ECONOMICS · Report · 16 Jun 2020

The Russian Finance Ministry is very close to setting a new quarterly record in terms of primary OFZ placement. To beat the previous one, the government needs to raise about R12 bln during the next two auction days. However, even a successful second quarter is not enough to cover all the financin...

Fiscal rule suspended
COLOMBIA · In Brief · 16 Jun 2020

The government formally asked the external committee of the fiscal rule to suspend the rule in 2020 and 2021. During a meeting that took place on June the 15th, the committee unanimously voted in favor of the government’s request. Its members consider the leeway given by the parametric deviations...

China virus check – week ending June 15
CHINA ADVISORY · Report · 16 Jun 2020

Our latest data for economic activity in China shows a general improvement in trends: 1) Rising coal consumption in the power industry and slightly positive operations for iron ore blast furnaces. 2) Traffic congestion was surprisingly weak. 3) Expressway traffic was generally positive W/W...

Peru macroeconomic forecasts
PERU · Forecast · 16 Jun 2020

We have kept our 2020 growth forecasts unchanged at-17% oya and raised our 2021 on the back of a slightly stronger rebound. We have also made some adjustments to our monthly GDP estimates. We still see 2020 Q2 growth at -27% oya and -70% q/q, saar, despite the deeper fall in April (by -40.5% from...

Peru: Trapped in its own web
PERU · Report · 16 Jun 2020 · 1 response

Once again, politics has taken a front seat in Peru. Although the president, Martín Vizcarra, and his cabinet initially were perceived by the public to have dealt well with the Covid-19 crisis when it erupted in mid-March, recently they have experienced a drop in popularity. Firstly, and despite ...

Russian gas supermajor to pay Poland USD 1.5 billion
RUSSIA / FSU POLITICS · In Brief · 16 Jun 2020

On June 15 Gazprom announced that it will repay a Polish state company called PNGiG USD 1.5 billion. The payment will be completed by July 1 2020. The payout is due to Gazprom overcharging. PNGiG took legal action to secure the reimbursement. On March 30 PNGiG won a court case at the internationa...

Funchal appointment shows commitment to fiscal austerity
BRAZIL POLITICS · Report · 15 Jun 2020

Minister of Economy Paulo Guedes acted quickly and appointed economist Bruno Funchal as the new Secretary of the National Treasury. He will replace Mansueto Almeida, who will step down by August. Funchal is currently the Director of Programs at the Ministry of Economy. Before that, he was Secreta...

Gross Debt or Net Debt: Which Best Measures the Fiscal Imbalance?
BRAZIL ECONOMICS · Report · 15 Jun 2020

The gross debt of the general government, in the Brazilian concept, is the sum of the stock of bonds sold by the Treasury and the repo transactions contracted by the Central Bank. In turn, the net debt, in the only definition that makes economic sense, is the gross debt minus international reserv...

Mansueto’s exit and other weekly topics
BRAZIL POLITICS · Report · 15 Jun 2020

A busy week in Brasília: Congress analyzes presidential vetoes. The Senate may vote on MP 936, on salary and working-hour reductions. The Federal Supreme Court resumes discussion of the "Fake News" inquiry. In the economy, we highlight the Copom meeting on interest rates. Mansueto Almeida’s exit ...

Inflation surprises sharply on the downside in May
ISRAEL · In Brief · 15 Jun 2020

The CPI in May declined by 0.3% m/m and fell to -1.6 y/y (from -0.6% in April). The market was expecting a positive index of 0.1% m/m. Core inflation (excluding energy and fresh produce) declined by 0.5% y/y (yes, negative) from +0.2% last month. The items which surprised on the downside include ...

Chile Covid Response: Mañalich Out, Stimulus Agreement In.
CHILE · In Brief · 15 Jun 2020

After a fairly reasonable start, Chile is now one of the world’s most affected countries by Covid-19. Chile is now number three in the world for new cases of coronavirus, and number six in cases per million. The mishandling of the pandemic has now cost Health Minister Jamie Mañalich his job. Pres...

Germany lobbies for pipeline from Russia
RUSSIA / FSU POLITICS · In Brief · 15 Jun 2020

On June 14 Germany lodged an official protest against the US bill to widen sanctions against Nord Stream 2. This is a pipeline from Russia under the Baltic Sea to Germany. The US already has sanctions against the USD 11 billion pipeline. The proposal is to extend them. Senator Ted Cruz is one of ...

External fundamentals continue to support a strong shekel
ISRAEL · Report · 15 Jun 2020

The current account surplus increased in Q120, supportive of a strong shekel. Credit card purchases declined in the first week of June, following strong growth in May. Consumer confidence improved in May, supportive of household demand. We expect inflation in May to reach 0.1% m/m and possibly ze...

Politics: AMLO increasing polarization
MEXICO · Report · 15 Jun 2020

The political environment continues to deteriorate as the government’s coronavirus “strategy” has failed to stem the pandemic in Mexico, and its economic policies have been equally unsuccessful in mitigating the effects of a deepening recession. But one thing everyone can be certain of is that th...

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