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Country Insights

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The Current Account Deficit Deteriorated in the Second Quarter of 2013
SOUTH AFRICA - Report 10 Sep 2013
Figures released today by the South African Reserve Bank (SARB) show that the current account balance deteriorated in the second quarter of 2013 (Q2 2013). The deficit on the current account increased from R190.9 billion in Q1 2013 to R216.2 billion in Q2 2013, partly due to weak export growth. A...

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Government, stocks drive Q2 growth
TURKEY - Report 10 Sep 2013
Today’s Q2 GDP growth came in at 4.4%, y/y, which was higher than the consensus forecast of some 3.5%, and our even softer estimate of 2.5%. Growth was driven by private consumption, government spending (notably investment) and inventory build-up, all of which turned out fairly stronger than our ...

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A Note on PKK and Gezi Parki Demonstrations
TURKEY - In Brief 10 Sep 2013
PKK suspended the withdrawal of its guerilla force from Turkey, accusing AKP of planning a war on Kurds. Essentially, the Peace Process is dead.  AKP’s much-advertised reform package is delayed and is unlikely to satisfy even the minimum of Kurdish demands. I don't expect a return to insurgency u...

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On Q2 GDP Growth
TURKEY - In Brief 10 Sep 2013
Today’s Q2 GDP growth came in at 4.4%, y/y, which was higher than the consensus forecast of some 3.5%, and our even softer estimate of 2.5%. Growth was driven by private consumption, government spending (notably investment) and inventory build-up, all of which turned out fairly stronger than our ...

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Uninspiring Export and FDI Data
PHILIPPINES - In Brief 10 Sep 2013
For the second consecutive month exports continued to show positive but lackluster growth, inching up by 2.3% in July.  Electronic products, the country’s top export, saw its first positive yoy growth this year at 11.2 percent; however, the boost was due to base effect as electronics shipments po...

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A Question of Strategic Timing
MEXICO - Report 10 Sep 2013
Executive Summary Some moves in recent weeks by the administration of President Enrique Peña Nieto in relation to its structural reform agenda may have been seen at the time as surrendering in the face of pressure from protesting social groups. The decision in late August to postpone a vote on th...

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Petronas' Departure from Venezuela
VENEZUELA - In Brief 09 Sep 2013 2 responses
According to Reuters, Malaysian state oil company Petronas announced it quit its participation in Petrocarabobo, a 400,000 b/d Orinoco Oil Belt project in which Petronas held 11%. The other partners are PDVSA (60%), Repsol (11%), ONGC Videsh (11%), Oil India (3.5%) and Indian Oil Corp (3.5%).  Pe...

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Encouraging July Fiscal Numbers
PHILIPPINES - In Brief 09 Sep 2013
There are a number of positive signals that can be gleaned from the July fiscal performance report, including: 1. Commendable increases in tax revenues, with BIR and BoC collections rising 20% and 13.5%, both above their first half growth rates of 14% and 1.2% respectively.  Coming from its flatt...

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Political Insights: Week of September 9
BRAZIL POLITICS - Report 09 Sep 2013
All eyes are on the Supreme Court (STF), which may conclude the Mensalão (monthly payoff scandal) trial this week.On Monday, President Dilma Rousseff meets with allied leaders to discuss the presidential vetoes to be analyzed on September 17. The cycle of roadway concessions starts this week. CNT...

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Fiscal Policy Remains Expansionary
BRAZIL ECONOMICS - Report 09 Sep 2013
The big surprise in the minutes of the last COPOM meeting was the claim that there are “conditions, over the horizon relevant to monetary policy, for the public sector balance sheet to shift to the neutral zone.” This is especially strange after the recent statements by COPOM members of concern o...

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Draft Reform of FX Law
VENEZUELA - In Brief 09 Sep 2013 2 responses
The available draft of the new Forex Law (Ley Contra los Ilícitos Cambiarios, LCIC) is a move towards a more flexible and open foreign exchange regime.The project brings few substantive changes to the definition of offenses and significantly increases penalties. The fundamental change, in our vie...

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Inflation and Growth: Where to?
BRAZIL ECONOMICS - Report 09 Sep 2013
Executive Summary Inflation in July was near zero, but this does not represent a trend reversal. The 12-month forward-looking expectations continue to rise, at more than 6% a year; the 12-month inflation of non-tradables is still growing above the upper limit of the target interval; and even thou...

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Gross Reserves Fell to 5% in August
UKRAINE - In Brief 09 Sep 2013
Gross foreign reserves declined $1.1 billion (4.7% m/m) in August down to $21.65 billion or 2.4 months of future imports, according to the Central bank report on September 6th.It is the lowest level of gross foreign reserves over the last seven years.  Still in 2006 when Ukraine had reserves near...

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Mexico's Fiscal Reform and Economic Package for 2014: Back to Deficit Financing
MEXICO - In Brief 09 Sep 2013
The government announced today a very significant fiscal package for 2014, as well as an ambitious fiscal reform. In essence, both proposals are oriented to increase public sector revenues in order to augment spending in four distinct areas, two traditional and two new ones. The former include mo...

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Weekly Tracker: September 8-14
TURKEY - Report 08 Sep 2013
Executive Summary Obama is not guaranteed to receive the go-ahead for Syria from the House.An airstrike on Assad’s assets will degrade his capacity to execute the war and give the rebels the upper hand. Yet, the threat of Shia Axis taking revenge on Turkey can’t be dismissed. Ankara is on the ver...