Country Insights

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Surprise interest rate hike
PHILIPPINES - In Brief 14 Jul 2022

After telling reporters some weeks ago that he preferred to do interest rate hikes 25bp at a time, Governor Felipe Medalla announced today that the Monetary Board decided to raise policy rates by a hefty 75bp in an off cycle move. This followed two separate 25bp increase in the last two month...

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EU tells Lithuania to allow rail transit of Russian goods
RUSSIA / FSU POLITICS - In Brief 14 Jul 2022

On July 13 the EU said that Lithuania must allow all Russian goods to be transported through its territory to the Russian exclave of Kaliningrad. Only weapons are banned. Road transport of certain goods remains banned.

The relaxation of the rail transit ban is good news for Russia. Sup...

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Fiscal policy on the move
HUNGARY - In Brief 13 Jul 2022

Well, it cannot be justly said that the government is not moving quickly enough once it really feels the need to do so. Most lately, the following series of action took place:

1. Two days ago, the cabinet detailed in a decree its plans for this year's HUF568bn (0.9% of GDP) r...

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Sanctions impact Russian IT
RUSSIA / FSU POLITICS - In Brief 13 Jul 2022

In April 2022 the Prime Minister asked IT specialists not to leave the country. Russia is still trying to build a sovereign internet. 

Digital Platforms is a Russian IT company that has made NashStore, which is Russia's answer to Google Play. It is doubtful that Russian alternativ...

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Lira paused the vote on the PEC on Fuels due to technical difficulties, Congress approved the LDO, and Lula will meet with Rodrigo Pacheco today
BRAZIL POLITICS - Report 13 Jul 2022
The main text of the PEC on Fuels was approved with 393 votes in favor and 14 against. Lira announced the suspension when the edit that removes the state of emergency from the text was being analyzed. We still believe that the PEC on Fuels will be approved. Yesterday, Congress concluded the appro...

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The Russian budget remains in surplus in 1H22
RUSSIA ECONOMICS - In Brief 13 Jul 2022

The Ministry of Finance reported that in 1H22, the federal budget revenues reached R14.0 trln, i.e., 56.0% of the target. Spending reached R12.6 trln over the same period (53.4% of the annual target). Th...

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Western armaments for Ukraine
RUSSIA / FSU POLITICS - In Brief 12 Jul 2022

NATO and EU countries have been supplying Ukraine since 2014. However, until 2022 this is mostly non-lethal aid. Ukrainian military officers have been trained in the US since the 1990s.

The US sold Ukraine Javelin anti-tank weapons from 2018. Ukraine started to buy TB2 drones from Turk...

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President Cortizo announces that he plans to continue his tenure after his medical checkup in Houston. More subsidies are on the table to tame the inflationary effects.
PANAMA - In Brief 12 Jul 2022

In a pre-recorded televised conference yesterday, Laurentino Cortizo announced that his health is stable. He plans to continue leading the Executive until the end of the Constitutional term in July 2024. Last week Cortizo traveled to Houston, Texas, to obtain a second opinion about the diagnos...

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Ukraine War situation
RUSSIA / FSU POLITICS - In Brief 12 Jul 2022

Russia is bombarding Sloviansk in east Ukraine. Mostly, Russia is regrouping after taking Lysychansk. Russia appears to have learnt from its mistakes in February and March. Its strategy is now bite and hold. It concentrates overwhelming firepower on one area for as long as it takes to break th...

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Stabilization with tailwinds from oil
VENEZUELA - Report 12 Jul 2022
Stabilization is advancing, thanks to tailwinds from rising oil revenue that are allowing the central bank to defend the bolivar energetically. Ultimately, it is this strategy of defending the bolivar that is setting the path for exchange rates and inflation both. Cash inflows and a political ...

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Just as expected: the base rate and the interest rate corridor rose by 200bps today
HUNGARY - In Brief 12 Jul 2022

Today's non-rate-setting Monetary Council meeting, which is regularly held once a month, was turned into a rate-setting event, as expected on the basis of hints from the MNB given last week. The base rate went up to 9.75%, the same as the 1-week depo rate, and the interest rate corridor r...

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Politics: One year on, the presidential succession process heats up
MEXICO - Report 12 Jul 2022
Ever since AMLO got the ball rolling on the incumbent party’s presidential succession efforts over a year ago by beginning to signal his preferred nominees, the 4T camp has been gearing up for the battle it will face two years from now. Although any campaigning for 2024 nominations is legally pro...

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The vote on the LDO was postponed, the government is concerned about the opposition’s edits to the PEC on Fuels, and Sergio Moro will announce his candidacy in the elections today
BRAZIL POLITICS - Report 12 Jul 2022
The rapporteur of the LDO, Senator Marcos do Val (Podemos-ES), removed from his report and the text the mandatory execution of amendments to the secret budget. One of the factors that contributed to the postponement is the disagreement between deputies and senators regarding the change in voting ...

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The end approaches for Castillo; inflation remains stubbornly high
PERU - Report 12 Jul 2022
In this report, we discuss how long President Pedro Castillo is likely to remain in office; examine the link between private consumption and mass drawdowns from pension funds; and look at Peru’s inflation performance. With Peru’s commodity prices falling and political risk rising, we have decided...

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Outlook on the recovery
INDIA - Report 12 Jul 2022
The most interesting question in Indian economics concerns the strong performance of listed companies in late 2021 and early 2022: will this be maintained and will it carry forward? Or will it peter out? Strong firm performance has been assisted so far by high export growth, but there are some...