Country Insights

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The Inflation Threat
RUSSIA ENERGY / FINANCE - Report 29 Sep 2015
Russia’s 2015 economic slump will be deeper than previously expected, due to the unfavorable external climate and the drop in oil prices. GDP contracted by 4.6% y/y in Q2 (atop a 2.2% contraction in Q1), on decline of domestic demand and investment. Household demand has been stalled by a 10% fall...

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Exports to Haiti threatened by bans
DOMINICAN REPUBLIC - Report 28 Sep 2015
In June and July economic activity accelerated. The Monthly Indicator of Economic Activity (IMAE for its Spanish acronym) estimated the increase in production for June at 6.5%, and for July at a surprising 7.5%. Inflation in August with respect to July, as measured by the percentage change in ...

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Week of September 28
BRAZIL POLITICS - Report 28 Sep 2015
For President Dilma Rousseff, this will be one of the most important weeks since her reelection. She is betting big on ministerial reform to rekindle dialog with her governing coalition, especially the PMDB. In Congress, she faces a difficult test: voting on the vetoes with a fiscal impact of R$ ...

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Business Credit Decelerating Intensely
BRAZIL ECONOMICS - Report 28 Sep 2015
Companies are facing serious difficulties in obtaining financing. New loans to firms have been declining since the first months of 2014, and this trend has been worsening recently. The increasing Brazil risk and loss of investment grade makes access to foreign credit harder. This means the recess...

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Reading the Anecdotal Evidence
INDONESIA - Report 28 Sep 2015
Making a good judgment about the Indonesian economy based only on the official statistics is sometimes inadequate. At the same time, using only anecdotal evidence to measure the direction of the economy can also be misleading. However, using some anecdotal evidence to enrich the official data may...

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El Salvador: Slower and Slower
CENTRAL AMERICA - Report 28 Sep 2015
Growth in El Salvador continues to be sluggish, though there are also glimmers of recovery. Consumer prices have fallen in annualized terms for the eight months to August, leaving prices down 2%. The fiscal deficit problem persists, and political polarization has only hampered efforts to forge co...

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Volkswagen to have an impact on Hungary
HUNGARY - In Brief 28 Sep 2015
It would be terribly difficult to tell at this point , what exactly the effects of the ongoing Volkswagen case will be. However, it is increasingly for sure that the global impact will be significant and, more importantly for us, Hungary is unlikely to remain unaffected, because of its significan...

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Weekly Tracker: Sep 27-Oct 3
TURKEY - Report 27 Sep 2015
It wasn’t a Happy Id of Sacrifice for Turkey, as PKK killed 6 security personnel and wounded many. In the run-up to the November 1st elections, we predict more terror attacks and a vicious insurgency in the Kurdish cities. Meanwhile, AKP is losing support as a result of its crackdown to put down ...

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Business cycle conditions
INDIA - Report 25 Sep 2015
While many people expected conditions to change under the new government, the business cycle downturn that began in Q1 2012 has not ended. The engine of earnings growth in large firms has not revived. There are concerns about credit stress in large firms, with growing interest payments and declin...

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Too skinny for a diet
CHILE - Report 25 Sep 2015
For the past several quarters the Central Bank has faced a dilemma. On one hand, inflation has run relatively high for quite a long time. On the other, economic activity is sluggish, and there is no sign of a recovery. Apparently the Board cares more about short-run inflation; the Board announced...

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Peace Colombian Style
COLOMBIA - Report 24 Sep 2015
Yesterday’s announcement on an agreement between the Government and FARC on the issue of transitional justice marks what has been interpreted as a point of no return in the peace negotiations. President Santos went as far as saying that a peace agreement would be signed on the 23rd of March of 2016.

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MNB has announced a supplementary measure today
HUNGARY - In Brief 24 Sep 2015
I am sorry to return to the same subject within one day, but as it happened, the MNB has just announced a supplementary measure, in addition to those published after yesterday's Monetary Council meeting. It is about the central bank's interest rate corridor around the (unchanged) 1.35% base rate,...

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Dilma Rousseff Government
BRAZIL POLITICS - Report 24 Sep 2015
The fear around the possibility of the opening of an impeachment process has caused President Dilma Rousseff to negotiate the ministerial changes directly with the PMDB in the House of Representatives. The negotiations are taking place with party leader Leonardo Picciani (RJ), linked to the Pr...

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Central bank cuts policy rate by 5ppt down 22%
UKRAINE - In Brief 24 Sep 2015
On September 24th Management Board of the National bank of Ukraine approved policy rate cut by 5ppt down to 22% since September 25th. This was already second policy rate cut over the last two months. On August 28 the Central bunk reduced policy rate by 3 ppt down to 27%. The tendency is quite pos...

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Horse race
PHILIPPINES - In Brief 24 Sep 2015
So far, there are three. In order of their announcements to join the presidential race, these are Vice President Jejomar Binay, former Interior Secretary Mar Roxas and Senator Grace Poe. Latest polls show that the last one out of the gate, i.e., Senator Poe, leading by a nose and that for practic...