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Country Insights

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​Earthquake in AKP
TURKEY - In Brief 03 May 2016
In our recently published Quarterly Report, I predicted that political risks might begin to be discounted by markets as early as by June or July. One of these risks was the growing rift between president Erdogan and PM Davutoglu. Developments on Friday and over the weekend might possibly expedite...

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Week of May 2
BRAZIL POLITICS - Report 02 May 2016
The Impeachment Committee in the Senate is expected to approve the admissibility of the impeachment of Dilma Rousseff on Friday. The PMDB will release a document detailing proposals for education and healthcare, and against corruption. The PSDB will decide on its participation in an eventual Teme...

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The MNB's educational foundations are now officially world-(in)famous
HUNGARY - In Brief 02 May 2016
Today, the case of the MNB's educational foundations, which have become a key political issue domestically over the last two weeks or so, have made it to the front page of the Economist. The paper describes the case as a stupid political scandal, and indeed it is one of that type, most probably w...

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An increasingly fragile financial sector
CHINA FINANCIAL - Report 02 May 2016
• China’s financial system is becoming increasingly complicated and confused (not to mention confusing), and this is most likely a consequence of a contraction of PBoC reserves (after two decades of expansion) and what we can only assume is a rising amount of unrecognized bad debt, which ties up ...

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Q1 2016 preliminary results: 6.1% GDP growth and a decline in unemployment
DOMINICAN REPUBLIC - In Brief 02 May 2016
The Central Bank announced that economic activity starts up strongly in 2016. Official figures set GDP growth in Q1 2016 at 6.1% compared to q1 2015. Although in January the short term indicator of economic activity reflected a relatively low growth, in February and March activities picked up sig...

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The Labor Market Continues to Deteriorate
BRAZIL ECONOMICS - Report 02 May 2016
The clearest reflection of the severe recession, which is far from over, is the worsening of the labor market. The consequences are a reduction in the level of employment and real wages, accentuating the contraction of household consumption and reducing tax receipts, making the fiscal adjustment ...

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Resilient Yet Vulnerable
TURKEY - Forecast 01 May 2016
After a very rough start into the year, Turkish markets are benefitting greatly from the dramatic improvement in global risk appetite. Thanks to this supportive backdrop and with headline inflation in cyclical decline, largely owing to lower food prices and base effects, the CBRT has started anot...

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Economy underperforms expectations in first quarter
ARGENTINA - Report 29 Apr 2016
In the first quarter, the Argentine economy deviated from our expectations in three areas: inflation, growth, and foreign trade. Even though the market exchange rate is still within the range we had predicted, examining the functioning of the free floating foreign exchange market after the elimi...

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Maduro retakes the offensive
VENEZUELA - Report 29 Apr 2016
President Maduro is back on the offensive in hopes of lasting out its term (till 2019). It seeks to convey that its power is well consolidated and that it will survive any attempt to end its administration before the end of its constitutionally mandated term, and uses the Supreme Tribunal of Just...

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Current Government and Private Investment in the South African Economy
SOUTH AFRICA - Report 29 Apr 2016
​South Africa needs more investment spending than is currently taking place in order for the economy to grow at a rate that is necessary to pull millions of people out of poverty, generate employment opportunities and address the pressing challenge of high income inequality. Of more pressing curr...

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Expect CBR to stay on hold tomorrow, but minor cut is possible
RUSSIA ENERGY / FINANCE - In Brief 28 Apr 2016
With inflation going down (+7.3% y-o-y in March; +7.3% y-o-y in April based on weekly data) and oil strong oil rally there’s a growing pressure on CBR to cut rates. For instance, Minister for Economic Development called again for an immediate cut. But as we have stated earlier, monetary policy ha...

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IMF in Ecuador's Sight
ECUADOR - In Brief 28 Apr 2016
The earthquake of last April 16, has forced the government to seek help from the IMF. Minister of Finance Fausto Herrero confirmed he is working with multilateral to set a fast loan agreement to cover part of the losses from the natural disaster. He insisted, however, that the loan must come "wit...

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Wages fall behind inflation
VENEZUELA - Report 28 Apr 2016
​This year we see four minimum wage increases, driven by inflation and politics. Real wages will nevertheless plunge. The first hike this year came in March, when the minimum wage rose by 20 percent and the food bonus rose by 233 percent. We expect the next decree to be approved in coming days...

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Signs of Rebound
CHINA - Report 28 Apr 2016
GDP rose 6.7% y/y in Q1. Although that is still slower than in Q4 2015, improved main indicators for growth bolster our confidence in future growth. Industrial output rose 6.8% y/y in March, up 0.7 pps from the previous quarter. Fixed asset investment excluding agriculture rose 10.7% y/y in Q1, ...

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Terror, again
TURKEY - In Brief 28 Apr 2016
Turkey faced terror once again, this time in nation’s automotive capital Bursa, in front of the Historic Ulu Mosque. A woman believed to be affiliated with ISIS blew herself up, injuring 13 citizens. Eyewitness accounts have it that she stumbled in the last second, dropping a plastic bag, where s...