Country Insights

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Lira Pass-Through Drives Inflation
TURKEY - Report 05 Oct 2015
Consumer prices rose by a higher than expected 0.9% in September (expectation: 0.7%), which meant an increase in the 12-month rate to just under 8% (7.95%, to be precise) from 7.1% in August. Food prices explain about 0.2 percentage point of the increase in the 12-month rate with the rest attribu...

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A Pre-Election FAQ Sheet
TURKEY - Report 04 Oct 2015
The big “Syria story”, i.e. the one concerning Russian involvement in the Syrian war has only marginal relevance for Turkey. But the capture of a Turkish soldier by ISIS may lead to renewed cooperation between the terror organization and certain elements within the Turkish state. New attacks on I...

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Looking beyond December
VENEZUELA - Report 02 Oct 2015
With the support of over 50 percent of likely voters, the opposition is on its way to winning a National Assembly majority on December 6. Some even think that the opposition could win a two-thirds majority. We’re more cautious. The heavily tilted playing field will play a larger role as elections...

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Dilma Rousseff Government
BRAZIL POLITICS - Report 02 Oct 2015
President cuts eight ministries and reduces ministers’ salaries by 10% Today, October 2, President Dilma Rousseff divulged her administrative and ministerial reforms, with the objective of reconstructing her governing base in the National Congress. The number of ministries fell from 39 to 31.

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A Mild Slowdown, the 2016 Budget and the Political Headlines
PANAMA - Report 01 Oct 2015
As we expected, real GDP growth for the second quarter of 2015 was 5.8% and 6.0% in the first semester. In H1 2015, the dynamic sectors of the economy included electricity, gas and water; social and private health services; and financial intermediation. Commerce, Transportation, and Construction ...

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Should the Central Bank Exchange its Currency Swaps for Reserves?
BRAZIL ECONOMICS - Report 01 Oct 2015
Interventions in the foreign exchange market are a controversial subject. While small interventions trying to dampen excessive volatility are one thing, heavy interventions to change the level of the exchange rate, when the economy is suffering from extreme macroeconomic imbalances, is quite anot...

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Economy Stabilizes, But Recovery is Far Away
UKRAINE - Forecast 01 Oct 2015
We continue to observe positive developments in the economy. GDP shrinkage slowed down from -17.2% y/y in Q1 to -14.6% y/y in Q2.Industrial output’s ongoing decline shrank “just” -5.8% y/y in August, from -20.5% y/y in H1. As the hryvnia strengthened, disinflation was also noticeable. The risks t...

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A Sobering Forecast
MEXICO - Report 01 Oct 2015
The economy continues to show signs of weakness. The leading economic indicator slipped 0.09 points from June to July, to 99.6 points (below the threshold of its long-term trend). With this in mind, we believe GDP growth will be 1.8% in Q3, and 2.0% in Q4. Consumer inflation has remained stubb...

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Once more on Volkswagen's impact on growth
HUNGARY - In Brief 01 Oct 2015
A few days ago, we said that based on then available information, the running Volkswagen case was likely to cut Hungary's real GDP growth by up to 0.5% points over the next 12 months. Then a day later economy minister Varga said it was 0.3-0.6%, although he did not clarify if he meant an annual o...

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Macro figures of the 2016 budget bill: a carbon copy of 2015; deficit of NFPS set at 2.3% of GDP
DOMINICAN REPUBLIC - In Brief 30 Sep 2015
Yesterday, the government submitted to Congress the budget bill for 2016. The bill set total expenditures and financial applications at DOP 663.6 bn, equivalent to 20.1% of GDP. Primary expenditure is estimated at 17.1% of GDP, 0.4% less than the level set in the 2015 budget Authorities forecast ...

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Dilma Rousseff Government
BRAZIL POLITICS - Report 30 Sep 2015
he CNI/Ibope poll released today, September 30, showed a stable evaluation of Dilma Rousseff’s government. The positive percentage ("excellent/good"), regular, and negative ("bad/terrible") fluctuated within the margin of error, which is two percentage points

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South Africa’s Economic Freedom: Government Consumption and Inflation
SOUTH AFRICA - Report 30 Sep 2015
In mid-September 2015 the Fraser Institute released its annual report on the Economic Freedom of the World (EFW) for the year 2013, and South Africa’s global ranking had slipped from 93 in 2012 to 96 in 2013. To construct the EFW index, forty-two data points are utilized in measuring the degree o...

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Which election outcome will the markets like?
TURKEY - In Brief 30 Sep 2015 1 response
An esteemed reader wrote to us “Crew, What do you think would market responses be, based on your views and the views of your client base into the elections, to the different plausible electoral outcomes, especially: - AKP simple majority - Coalition with CHP - Coalition with MHP What would Cosmo ...

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A Balance of Payment Crisis in the Making?
ARGENTINA - Report 30 Sep 2015
After the primary elections in August and with less than a month to go for the general presidential election on October 25th, political analysis shifted back to polls, in an attempt to anticipate the awaited outcome. Yet, despite the fact that more than a month passed since the primaries and many...

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The Political Economy of the SA Steel Industry
SOUTH AFRICA - Report 30 Sep 2015
Schumpeter famously argued that innovation along with the destruction of old technologies are fundamental in the capitalist economy, its growth and technical change over time. Hence in a capitalist economy, profit-seeking firms (and industries) innovate for growth and survival. Globalization, esp...