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Covid-19 weekly update – week ending October 19, 2020 – further signs of mild weakening among consumers
CHINA ADVISORY - Report 20 Oct 2020
The trends continue of mild growth in the state sector and growing weakness in the consumer sector. Generally weakening growth in key consumer metrics, including auto sales, congestion, and mixed film attendance, suggest that the demand side is still a problem for China. Much of the recovery is ...

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A brighter economic outlook amid high political risk
ECUADOR - Forecast 20 Oct 2020
This year we have assumed the inevitable. GDP will fall between 10% -11% by the end of the year, as it has already fallen 9.97% q/q and 12.4% y/y in Q2 2020. Household consumption fell 11.9% y/y and government consumption was also down, by 10.5% y/y, in Q2. Exports, which until Q1 contributed pos...

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US indicts 6 Russian intelligence officers for cybercrime
RUSSIA / FSU POLITICS - In Brief 19 Oct 2020
On October 19 the US formally charged 6 GRU officers with cyberattacks on the Ukrainian power grid, the Winter Olympics and the French elections. The officers are said to have carried out a NotPetya malware attack that impacted computers all over the world resulting in losses of over USD 1 billio...

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Everything still depends on Covid prospects
HUNGARY - Forecast 19 Oct 2020
Forecasts on COVID-19 have proven to be largely wrong everywhere around the globe so far, and ours have been no exception. Unfortunately, analysts must have a view on the ongoing pandemic all the time, as everything else will greatly depend on the prospects for the epidemic. So, we are also start...

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​OMAN: Bonds are finally coming to market
GULF COUNTRIES - Report 19 Oct 2020
* Oman is coming to market to raise up to $4bn in 3/7/12 year tranches. * The revised budget expects a full-year deficit of -$10.9bn (-16.3% of GDP). * The fiscal deficit disclosed for Jan-Aug of -$4.3bn seems to be an undercount. * Government debt is at least $48bn (72% of GDP), and GRE d...

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Emergency aid, Bolsonaro, the municipal elections and other weekly topics
BRAZIL POLITICS - Report 19 Oct 2020
The highlight of the week will be the confirmation hearings in the Senate for government appointees to regulatory agencies, the TCU and CVM. Senators will also analyze the president’s first appointment to the Federal Supreme Court (STF), Kassio Marques, while the STF will decide on the removal of...

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Shortening of the Debt Maturity and Risk of Financial Repression
BRAZIL ECONOMICS - Report 19 Oct 2020
The scare provoked by the information that the debt/GDP ratio will reach 100% at the end of 2020 and continue to grow thereafter is one thing. The foreboding generated by its consequences, which are severe, is another thing, much different. The higher risk is being reflected in asset prices: both...

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Shallower recession in 2020, and stronger rebound in 2021
PERU - Forecast 19 Oct 2020
We tweaked our forecasts last week, on the back of the most recent reports. We now expect a shallower recession in 2020, with real GDP contracting by 13.7% y/y, less than our July forecast of -17% y/y. We also forecast a stronger rebound in 2021, reaching 11.1% y/y (from 6.5% y/y previously). The...

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South Africa’s economic reconstruction and recovery plan offers little new
SOUTH AFRICA - Report 19 Oct 2020
The third and last phase of South Africa’s response to Covid-19, the economic reconstruction and recovery plan, was delivered by President Ramaphosa on October 15. The first two phases outlined at the beginning of the pandemic response were themed "preserve" and "recover". The former comprised he...

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The recession and deflation support further accommodation
ISRAEL - Report 19 Oct 2020 1 response
The deflationary environment persists, with core inflation down -0.4% y/y in September. Economic indicators point to a sharp deceleration of activity due to the second shutdown. Further monetary accommodation is expected from the Bank of Israel on Thursday. A negative sovereign rating outlook for...

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Economics: Surprise details in the government's pension reform
MEXICO - Report 19 Oct 2020
Something troubling happened between the time the business community and President López Obrador announced a plan to reform the public pension system and the reform bill the administration delivered late last month. The praiseworthy purpose of the reform as agreed in July is to increase the n...

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Politics: Another poll to decide Morena’s future
MEXICO - Report 19 Oct 2020
When the INE-supervised public opinion survey to choose the next leader of López Obrador’s National Regeneration Movement produced a tie the week before last between Porfirio Muñoz Ledo and Mario Delgado, we got another look at the intensity of the infighting in the party as well as a reminder of...

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US rejects Putin's proposal to extend START
RUSSIA / FSU POLITICS - In Brief 18 Oct 2020
On October 16 the US government said that prolonging the START Treaty by 1 year is out of the question. Putin had suggested doing so while a long term replacement is negotiated. Putin had wanted there to be no freeze on nuclear warheads during the extension.The US suggested a one year extension b...

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Personal debt problem in Russia
RUSSIA / FSU POLITICS - In Brief 18 Oct 2020
On October 15 a report was published on debt in Russia. Overdue loans are at an all time high. 12.5 million loan repayments are over 90 days behind. The National Association of Professional Collection Agencies revealed this. The credit bureau Equifax was also involved in the study. A further mill...

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The recession and deflation support further accommodation
ISRAEL - In Brief 18 Oct 2020
Highlights:Inflation in September declined by -0.1% m/m and -0.7% y/y. Core inflation reached -0.4% y/y following -0.5% in August. Eight out of the ten major CPI items were zero or negative y/y. The PPI (excluding energy) declined by 1.9% y/y. Deflation in Israel is due to the steady shekel appre...