Country Insights

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“It never rains but it pours”
SOUTH AFRICA - Report 02 Jun 2014
Recent prints of South African economic indicators paint a picture of an ailing domestic economy badly in need of emergency procedures before it is too late. On the whole, downbeat economic activity (particularly in mining and manufacturing) coupled with elevated inflationary pressures have so fa...

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Frustration Over GDP Growth
BRAZIL ECONOMICS - Report 02 Jun 2014
Nobody had the illusion that GDP growth in the first quarter would bring cheer to the government, but the result was even more frustrating than many imagined: growth was only 0.2% (0.7% annualized), worse than the 0.4% in the last quarter of 2013 (Graph 1). Of even more concern than the extremely...

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Political Insights: Week of June 2
BRAZIL POLITICS - Report 02 Jun 2014
The House agenda contains several controversial topics, including the suspension of the act by the National Agency of Electric Energy (Aneel) denying compensation of R$ 7 billion to residential electricity consumers, the end of social security contributions from inactive civil servants, and the r...

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Turkey’s Stable Disequilibrium
TURKEY - Report 01 Jun 2014
Executive SummaryJune will witness the selection of presidential candidates by major parties. We bet on Erdogan for AKP, but the opposition is yet to find viable champions. We still assign 65% chances to an Erdogan victory, citing three major reasons: No cross-party votes in either round, the pos...

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Jokowi Likely to Take It
INDONESIA - Report 29 May 2014
Executive Summary On the heels of the parliamentary elections, Indonesian politics are heating up. The field has been winnowed to two presidential candidates (from an initial four), and two vice presidential candidates, who will stand for the July 9 vote. This means the election will be decide...

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Finally an agreement with the Paris Club
ARGENTINA - In Brief 29 May 2014
The government announced today that it finally reached, after long and complex negotiations, a first firm agreement with the Paris Club regarding its outstanding debt, which Argentina last defaulted in 2002. The current amount under negotiation stands today, based on April the 30th, at USD 9.7bn....

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V, J, or L?
PHILIPPINES - Report 29 May 2014
With the consensus forecast pegged at 6.4%, most analysts found the 5.7% 1Q14 GDP growth announced today surprising.But not us. We have maintained a below-consensus full-year forecast of 6.1% since early this year, expecting the first two quarters to be on the weaker side given the boost from ele...

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Inaction Speaks Louder than Words
VENEZUELA - Report 28 May 2014
Executive Summary The two dialogue processes that began in April are stuck. The government has made clear that it doesn’t intend to make a single concession to the opposition and that its promises to the business sector are mere words. The government has no incentive to make meaningful political ...

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Fending Off the Aggressor
UKRAINE - Report 27 May 2014
Executive Summary Criminal violence is exploding throughout Eastern Ukraine, while the economy sinks further into the red. Yet positive developments under the surface lead us to take an optimistic outlook. Ukrainian society is sick, and the road to recovery will be hard. But at least the patient ...

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Political Insights: Week of May 27
BRAZIL POLITICS - Report 27 May 2014
Several important events are expected this week.The STF rules on the case that questions savings account losses during economic plans of the late 80s and early 90s.The Central Bank makes its interest rate decision.Minister of Finance Guido Mantega meets with industry representatives to discuss pa...

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2014 Economic Performance Off To A Bad Start
SOUTH AFRICA - Report 27 May 2014
According to official figures released by Statistics South Africa, the inflation-adjusted gross domestic product (GDP) shrank by 0.6% on a quarter-on-quarter (q/q), seasonally adjusted annualized (saa) basis in the first quarter of 2014 (see Graph 1). Anemic mining and manufacturing activity was ...

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PAN Seeks Road to Recovery
MEXICO - Report 27 May 2014
Executive Summary Gravely worn down under the weight of its first 12 years in power, the National Action Party saw its extended process of internal decomposition greatly aggravated by its defeat in the 2012 elections. The setback also intensified the internal division that opened up in 2010 betwe...

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Housing at a Crossroads
MEXICO - Report 27 May 2014
Executive Summary Data on first quarter Gross Domestic Product (GDP) was the most significant item in a week chock full of major economic indicators. According to the report, the Mexican economy grew 1.8% above year earlier levels, a figure closely in line with our own estimate of 1.7%. The facto...

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Understanding the Paradox of the Labor Market
BRAZIL ECONOMICS - Report 26 May 2014
There is a contrast in the Brazilian labor market: on the one hand, the unemployment rate has been holding steady at minimum historic levels, indicating a situation near full employment, while on the other hand new hiring has been growing at a pace near zero, indicating weakening. Indeed, the job...

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Our Worst Fears Confirmed
ECUADOR - In Brief 26 May 2014
This weekend President Correa announced his decision to give green light to the initiative promoted by legislators from Alianza Pais of amending the constitution to allow "indefinite re-election" for all elected public representatives. His arguments were based on what he perceives as a an "eviden...