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Country Insights

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PM Erdogan Moves to Ban Co-habitation
TURKEY - In Brief 06 Nov 2013
We had predicted that the campaign for the March local elections will witness not only moderately higher budgetary spending, but ”social pork barreling”, namely ultra-conservative measures to appease AKP’s constituency. We were dead right. PM Erdogan told reporters that his “conservative democrat...

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Why is the Venezuela Oil Basket Price Falling?
VENEZUELA - Report 05 Nov 2013
The Venezuela oil basket price[1] has been falling and losing ground relative to WTI and Brent since September 2013. For the first time in two years, the Venezuela basket is lower than WTI.As shown on graph 2, Venezuelan oil prices closely follow Mexican heavy oil Maya. This reflects Pdvsa’s pric...

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The 2014 Budget and the Economy
MEXICO - Report 05 Nov 2013
Executive SummaryThe economic figures published in Mexico over the course of October point to an incipient recovery relative to data released in previous months. The most significant of the positive news items include:A slight increase in manufacturing output reported for August (+1.6% yoy);The 1...

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Political Insights: Week of November 4
BRAZIL POLITICS - Report 04 Nov 2013
A busy week in Congress: In the House, the rapporteur of the Mining Code may present his report. On the House floor, the new Civil Process Code may be voted upon. In the Senate, two important Constitutional amendment proposals are on the agenda: the Compulsory Budget and the amendment to institut...

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Politics Clouding the Economic Horizon
BRAZIL ECONOMICS - Forecast 04 Nov 2013
Executive Summary There will be no way for the government to repeat in 2014 the high economic stimulus dose applied in the last presidential election year (2010), which succeeded in boosting GDP growth to 7.5% that year, but also left an inflationary legacy that raised the 12-month IPCA measure a...

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Another Poor Inflation Print
TURKEY - Report 04 Nov 2013
At 1.8%, October CPI-inflation came in markedly higher than consensus (1.3%) as well as our more bearish forecast (1.5%), but thanks to last year’s high base, the 12-month rate nevertheless declined to 7.7%, from 7.9% a month earlier. Yet, both PPI and core inflation (I-index) rose, the latter mu...

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2014 Fiscal Budget
VENEZUELA - Report 04 Nov 2013
The government is budgeting a 3.7 percent of GDP deficit for the national government in 2014, according to the draft budget submitted to the National Assembly on October 15. We forecast a substantially lower deficit at 0.7 percent of GDP. As usual, both revenues and expenditures are underestimate...

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Price Controls and Fiscal Policy
BRAZIL ECONOMICS - Report 04 Nov 2013
The fiscal result for September was disastrous. The consolidated public sector (central plus state and municipal governments) recorded a primary deficit of R$ 9 billion. This lowered the primary surplus in proportion to GDP to 1.6% against 1.8% in August. After correcting the official figures for...

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Former Friends Fighting for Votes
COLOMBIA - Forecast 04 Nov 2013
Executive SummaryHouseholds are growing less indebted, due to slowing consumption lending – and that’s the main reason for the slowdown in consumption. Still, at nearly 74%, most household debt is still consumption debt. And consumption lending was rebounding in the first week of October. That’s ...

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A New Ballgame
ARGENTINA - Forecast 04 Nov 2013
Executive Summary President Cristina Kirchner’s chances of running for a third consecutive termare now nil, after midterm elections October 27th cut her party’s representation in Congress to 32%, from 54% in 2011. The political cycle of Kirchnerism is also over: the new Congress won’t pass the re...

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Political Insights: Week of November 4
BRAZIL POLITICS - Report 04 Nov 2013
A busy week in Congress: In the House, the rapporteur of the Mining Code may present his report. On the House floor, the new Civil Process Code may be voted upon. In the Senate, two important Constitutional amendment proposals are on the agenda: the Compulsory Budget and the amendment to institut...

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Weekly Tracker: November 3-9
TURKEY - Report 03 Nov 2013
Executive Summary March local election campaign started with headscarves in parliament and Mr. Sarigul, the popular mayor of Istanbul’s Sisli district, joining the CHP ranks. There is no more room for reforms until after the elections. We begin by outlining our preliminary predictions for the loc...

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Inflation Report: Nothing Surprising
TURKEY - In Brief 31 Oct 2013
As we were tied up at the economic congress in Izmir (apologies!), we couldn't hear Governor Basci speak today, but there is little surprising in what we read and heard so far.  Inflation yearend estimate (midpoint) is now 6.8%, which we knew from the MTP already, while Governor Basci has apparen...

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Entering a New Cycle?
CHILE - Report 31 Oct 2013
Executive Summary After 20 months with no change in the monetary policy rate, the Central Bank decided it was time to deliver a cut. The Board of the Central Bank of Chile decided in October to reduce the monetary policy rate from 5.00% to 4.75%. The timing of the move came as a surprise. The exp...

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Rebound Promises Improvement
INDONESIA - Report 31 Oct 2013
Executive Summary Q3 economic performance maintained its dynamism, according to corporate analyses released so far. Several of these reports chronicle continuing growth, bolstered by spending linked to the Ramadan celebrations (Ramadan shifts from year to year, and this year ran from July 8-Au...