Country Insights

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Datafolha: After six months in office, the Bolsonaro administration divides public opinion
BRAZIL POLITICS - Report 08 Jul 2019
The Datafolha survey released today, July 8, shows that after six months as president of Brazil, opinion regarding Jair Bolsonaro is divided. This result can be explained by Bolsonaro’s strategy of betting on controversial issues, such as legalizing the possession of firearms, which divide public...

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June inflation falls below 5%; monthly inflation is close to zero
RUSSIA ECONOMICS - In Brief 08 Jul 2019
Rosstat published today June 2019 CPI data. As was expected from weekly estimates, June inflation was close to zero on a monthly basis (+0.04% m-o-m) while annual inflation fell from 5.1% y-o-y in May to 4.7% y-o-y. The main reason for the rapid decrease in inflation last month was food prices dy...

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Frustration over infrastructure and despondency regarding monetary easing
BRAZIL ECONOMICS - Report 08 Jul 2019
The global economy is clearly decelerating its growth rate, but the prices of assets have been appreciating. The same pattern applies to Brazil, where there are no forces on either the aggregate demand or supply side to pull the economy out of the doldrums. The IBOVESPA has already risen above th...

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Markets will react today to the BoI rate forecast
ISRAEL - Report 08 Jul 2019
The fiscal deficit (LTM) moved higher in June to 3.9% GDP. The fiscal deficit is increasing and is likely to breach 4% GDP this year. Wage growth has moderated recently, up 3.0% y/y in April from 3.8% in March. Israeli saving institutions reduced their FX exposure in May to 16.5% from 17.2% in Ap...

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Disinflation: a pyrrhic victory
VENEZUELA - Report 08 Jul 2019
Disinflation is being driven by a sharp decline in consumption. Companies protect their cash flow by adjusting product lines and prices, generating volatility and lengthening the disinflation phase begun in February. We are seeing food price increases being followed by decreases one or two week...

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What we can learn from the Baoshang takeover
CHINA FINANCIAL - Report 07 Jul 2019
Special points to highlight in this issue: • The sudden takeover of Baoshang Bank on May 24 shocked markets and caused interbank interest rates to soar, probably because it suggested that lenders to Chinese banks might have to start taking responsibility for poor credit decisions. • Baoshang, h...

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Analyzing the Budget announcement of July 5, 2019
INDIA - Report 07 Jul 2019
The July budget speech, of the NDA-3, is the first of a five-year period. It is expected to establish the priorities and the work program of the coming five years. It takes place at a time when there is significant financial and economic stress. On about July 18, we will release our business cycl...

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CBRT Governor has been dismissed
TURKEY - Report 07 Jul 2019
CBRT Governor Mr. Murat Cetinkaya’s abrupt and rather arbitrary dismissal speaks volumes about President Erdogan’s intentions going forward, which is the topic of the first essay in the Politics section. While we still give him the benefit of doubt, he seems in no rush to announce ground-breaking...

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Russian budget execution being reformed
RUSSIA / FSU POLITICS - In Brief 07 Jul 2019
The Ministry of Finance suggested that a proper treasury payment system be introduced. This shall shift all budget transactions from ministries, regions and so on to the treasury. The aim is to move to a system of uniform accounting in the budget system. There are over 50 000 government accounts ...

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Russian coal exports in decline
RUSSIA / FSU POLITICS - In Brief 06 Jul 2019
Coal is one of Russia's many mineral resources. Exporting coal matters to the Russian economy though not as much as oil and gas. Coal exports to the EU are down sharply. To make it worse the world price is falling. A mild winter, green taxes and better fuel efficiency have all contributed to this...

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Pension Reform: Committee concludes vote on report
BRAZIL POLITICS - Report 05 Jul 2019
The Special Committee on Pension Reform in the Lower House concluded the vote on the report by Rep. Samuel Moreira (PSDB-SP). This is an important victory, not only for the government, but especially for the speaker of the Lower House, Rodrigo Maia (DEM-RJ). If, on one hand, Maia was unable to in...

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The South African Reserve Bank: Institutional credibility, macroeconomic stability and withstanding political games
SOUTH AFRICA - Report 05 Jul 2019
Now that the 2019 general elections have come and gone, and having returned Mr. Ramaphosa as the president of the country, his greatest battle lays in resuscitating the South African economy. This he will have to achieve while simultaneously fighting for control within his own political party,...

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Retail sales, wages decelerate on tight fiscal policy and higher inflation
HUNGARY - In Brief 05 Jul 2019
Retail sales growth decelerated in May, to 4.7% yoy in real terms and on seasonally and day-adjusted basis, from 6.1% yoy in April and 5.8% yoy reported for Q1.The local press and various private sector speakers are quoting the markedly lower unadjusted and day-adjusted figures (3% yoy and 2.6% y...

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Detente in Ukraine
RUSSIA / FSU POLITICS - In Brief 05 Jul 2019
The past week has seen a reduction in tensions in Ukraine. The Ukrainian Government and the pro-Russian rebels have agreed to pull back from the front line near Stanytsia Lushanska. This is in the Donbass Region. Ukraine has previously agreed to such pullbacks in other areas but such deals quickl...

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June inflation at 2.7%
PHILIPPINES - In Brief 05 Jul 2019
The government today announced that the headline inflation rate fell from 3.2% in May to 2.7% in June, lower than what analysts expected (2.9%). Data show that lower rice and oil prices combined to pull down the June inflation rate. Following the rice tariffication law liberalizing rice trade, pr...