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Country Insights

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First predictions on new election results
TURKEY - In Brief 25 Aug 2015 1 response
First predictions on new election results It is official. Turkey will be heading for the ballot box on 1st of November, under the premiership of Prof Davutoglu, who is expected to announce his Election Government Cabinet on Friday. He is extending offers to CHP, MHP and HDP, but the first two wil...

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GDP Growth Takes a Hit
SOUTH AFRICA - Report 25 Aug 2015
Real (inflation adjusted) gross domestic product (GDP) at market prices decreased by 1.3% on a seasonally adjusted annualized rate in the second quarter of 2015 according to official figures reported by Statistics South Africa. This follows quarter one’s modest growth of 1.3%, meaning that the ra...

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Confidence Continues to Tumble
SOUTH AFRICA - Forecast 25 Aug 2015
A combination of unfavourable factors arising both locally and internationally are placing a strain on South Africa’s already fragile economy. This has led to compromised confidence in the country for both consumers and business. Overall, we expect lacklustre economic performance as factors such ...

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Don't take your eye off the big picture
CHINA FINANCIAL - In Brief 25 Aug 2015 2 responses
With all this excitement in the market it is important to remember the big picture: 1. GDP growth will continue to slow, either steadily, by 100-150 bps a year through the rest of the decade, or disruptively, with growth stabilizing at 6-7% for the next two or three years, and then, once China hi...

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No reason to buy
CHINA FINANCIAL - In Brief 25 Aug 2015 2 responses
There are four possible outcomes over the rest of this week. First, and this is highly unlikely I think, today’s measures could cause markets to stabilize Wednesday and start rising thereafter. This would do wonders for Beijing’s credibility, but I still think there are so many implied options an...

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When will it stop?
CHINA FINANCIAL - In Brief 25 Aug 2015
Tuesday the PBoC lowered lending and deposit rates by 25 bps, to 4.60% and 1.75% respectively, and lowered the required reserve ratio by 50 bps. On Monday the regulators announced that Chinese pension funds would be allowed to hold up to 30% of their assets in stocks. Will these measures matter t...

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Week of August 24
BRAZIL POLITICS - Report 24 Aug 2015
The decision by the Prosecutor General of the Republic, Rodrigo Janot, to formally accuse Rep. Eduardo Cunha and Senator Fernando Collor will be the main topic of conversation this week in Congress. The Senate will decide if it will confirm Janot’s appointment for another two years; it may also v...

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New Expansion of Credit from Public Banks?
BRAZIL ECONOMICS - Report 24 Aug 2015
The depth of the recession is causing increasing alarm by the government, which has started to react. After reducing the fiscal effort promised for 2015 and coming years, it announced that public banks – Banco do Brasil and Caixa Econômica Federal – will expand the supply of credit to certain sec...

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As if Nature Itself is Protesting
ECUADOR - Forecast 24 Aug 2015
Though it’s still too soon to speak of recession in Ecuador, Q1 GDP performance, the negative oil price outlook for H2, casts doubt upon the official growth estimate of 1.9% for 2015. And economic prospects for 2016 look even worse as the Minister of Finance, Fausto Herrera declared the governmen...

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Guatemala: Will Pérez stay in power?
CENTRAL AMERICA - Report 23 Aug 2015
With less than 15 days before the September 6th presidential election, the political situation in Guatemala continues to deteriorate.Pressure for President Otto Pérez to resign increased Friday 21st, after the Attorney General, Thelma Aldana, and the International Commission Against Corruption Im...

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Monetary policy – developments on tactics and strategy
INDIA - Report 21 Aug 2015
Executive Summary A dramatic decline in inflation took place, from late 2013 onwards. Headline inflation is now at the inflation target. From 2013 onwards, monetary policy did not see this coming. This feeds into an interesting current debate about shifting the power to set rates from the Governo...

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Lava Jato Operation
BRAZIL POLITICS - Report 21 Aug 2015
The Prosecutor General of the Republic, Rodrigo Janot, formally charged the president of the House of Representatives, Eduardo Cunha (PMDB-RJ), for money laundering and passive corruption. Senator and former president of the Republic, Fernando Collor (PTB-AL) and former federal representative and...

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A slight problem with the government debt ratio
HUNGARY - In Brief 20 Aug 2015
Until now, we have been saying that should the cash deficit target of 2.7% of GDP be achieved, the general government debt ratio would most probably fall moderately, to 76.2% of GDP at year end from 76.9% of GDP at end-2014. In July, we also said that budget implementation was running largely on ...

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​Del Pino receives Maduro’s backing
VENEZUELA - In Brief 19 Aug 2015
Eulogio Del Pino, president of PDVSA, was appointed minister of Petroleum and Mining replacing Asdrúbal Chávez who is running for deputy to the National Assembly in Barinas state. The two highest-ranking positions in oil are back on the shoulders of one person. As president of PDVSA, Del Pino gai...

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NEW EXPENDITURE CUT
ECUADOR - In Brief 19 Aug 2015
Minister of Finance, Fausto Herrera announced that the government will cut $800 million from expenditures in addition to the $1.42 billion announced back in January 2015. Public investment will be reduced by $700 million and current expenditures by $100 million. We already expected a new cut anno...