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Country Insights

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IOF on Capital Flows to the Fixed-Income Market Removed
BRAZIL ECONOMICS - Report 05 Jun 2013
The Finance Ministry announced the elimination of the IOF (Tax on Financial Operations) on investments from abroad in the fixed-income market. The IOF rate had been raised from 2% to 4% on October 4, 2010, and then to 6% on October 18, 2010, staying there until today. The decision did not come...

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Update: No respite from Gezi Park demonstrations
TURKEY - Report 05 Jun 2013
Turkey is going through an extraordinary upheaval of-- so far-- peaceful nature. Organized and galvanized by social media, the "modernist" face of Turkey is on the streets. Even though some steps by AKP reveal a softening of attitude, there is no sign that the party is ready to abandon any of its...

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Industrial Production
BRAZIL ECONOMICS - Report 04 Jun 2013
After accounting for seasonal factors, industrial output rose 1.8% in April, or 8.4% in relation to the same month in 2012 (Graph 1). There were substantial increases in vehicles (8.2%); machinery and equipment (7.9%); and foods (4,8%), and the result for the month was very diffused, covering a l...

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Balancing Act
MEXICO - Report 04 Jun 2013
Last week, President Enrique Peña Nieto called for a national accord to promote productivity. According to government data, productivity is off by 0.7% compared to a year earlier. The president announced that he had ordered the creation of a consultative body, the National Committee on Productivi...

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Two-Camp Political Reform
MEXICO - Report 04 Jun 2013
The Pact for Mexico's trajectory and legislative calendar were effectively re-written by the National Action Party (PAN) decision to denounce in April illegal efforts by federal and state officials to buy votes and sustain a clandestine election campaign system. The initial result was an addendum...

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May Inflation: April, Replayed
TURKEY - Report 03 Jun 2013
In May, consumer prices rose by a lower than expected 0.15%, versus market expectations of around 0.4%, thanks to a somewhat deeper drop in food prices and a softer increase in transportation prices (Table 1). But because of last year's low base, the 12-month CPI inflation nevertheless edged up t...

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Credit: No Reasons for Optimism
BRAZIL ECONOMICS - Report 03 Jun 2013
In assessing the reasons for the weak GDP performance in the first quarter, two points stand out. The first is the fall in the contribution of household consumption, which grew only 0.1%, and the second is the slower growth of GDP in the service sector, largely determined by the stagnation of fin...

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Life After Gezi Park
TURKEY - Report 02 Jun 2013
We had predicted a scorching hot summer in Friday's Monthly Report, which proved prescient.AKP's shortsightedness and atrocious police brutality turned a sit-in by 50 tree huggers to rescue the trees in Gezi Park (Taksim Square Promenade) into a nation-wide outburst. The self-imposed coverage ban...

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Dominican Rep: Growth significantly lower than expected in 1Q-2013
DOMINICAN REPUBLIC - In Brief 24 May 2013
Yesterday, the Central Bank released its first quarterly report for 2013. The figures are staggering. Compared to the 1Q-2012, GDP growth was 0.3%, the lowest in almost 10 years (we forecasted 1%). Local manufacturing activity dropped by 3.7%, construction by 2.9%, and commerce by 2.6%. Agricultu...

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New deal DomRep-Barrick Gold increases significantly government revenues
DOMINICAN REPUBLIC - In Brief 13 May 2013
Last week, the governmentof the Dominican Republic and Barrick Gold Corp. announced that they reached apreliminary agreement in order to change the terms of their 2009 contract forthe exploitation of the gold mine in Pueblo Viejo. The new contract will significantly improvethe government’s cash f...

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Methodological concerns on inflation calculation
CHILE - In Brief 22 Apr 2013
Some days ago, a local bank’s report raised some doubts regarding the way in which the prices of some goods have being collected by the National Office of Statistics (INE). In particular, the report indicated that the evolution of some prices has been underestimated due to methodological failures...

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Dominican Rep placed Sovereign Bonds at 5.875%
DOMINICAN REPUBLIC - In Brief 12 Apr 2013
Yesterday, the government of the Dominican Republic announced that it successfully placed USD 1 bn in Sovereign Bonds. The interest rate negotiated was 5.875% on bonds with 10 years maturity. This has been the lowest rate negotiated by the DR since its first Sovereign Bonds issued in September 20...

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Russia: GDP growth slowed down to 2.1% in 4Q-12
RUSSIA ECONOMICS - In Brief 02 Apr 2013
Rosstat, a statistical agency, reported GDP figures for 4Q-12 in its second estimate. Russian economy slowed down to 2.1% y-o-y in 4Q-12 (compared to 3.0% in 3Q-12), according to the figures that were published today. Household consumption that expanded 5.8% y-o-y in stays the major contributor t...

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Chile: Bill that reduces stamp and duty tax to be sent to Congress
CHILE - In Brief 26 Mar 2013 2 responses
Minister of Finance of Chile Felipe Larrain announced today that the Executive will send a bill to Congress that reduce the stamp and duty tax on credit from 0.4% to 0.2%. The reduction in this tax (imposed on loans) is likely to generate more fears of overheating of the Chilean economy. Moreover...

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Dominican Rep: tax revenues above target
DOMINICAN REPUBLIC - In Brief 20 Mar 2013
Good news from the revenues side: during the first two months of the year, tax revenues were above target. Authorities reported a 108% accomplishment. Revenues totaled DOP 46.7 bn, 26.1% more than the first two months of last year. That was clearly the result of the recently approved tax reform a...