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Country Insights

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The High Opportunity Cost of Arrogance
ECUADOR - Report 23 Dec 2014
Executive SummaryPresident Correa has accustomed us to his displays of ideology bias and haughtiness. This past week the government denied entrance to a group of representatives from the German environmental parliament. The impasse ended up with Ecuador terminating the environmental cooperation w...

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Glimmers of Strength
MEXICO - Report 22 Dec 2014
Executive Summary The Mexican economy has been showing signs of firming: In November officials reported that GDP had rebounded to its “natural rate” of growth, of nearly 3%. But there are surprise headwinds, too. Industrial production in October was up 2.1% y/y, an expansion driven by manufacturi...

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Deep Recession and Large Risks in 2015
VENEZUELA - Forecast 22 Dec 2014
Executive Summary This report updates our macroeconomic outlook for 2015. In our central scenario, the economy sinks deeper into recession (–6.4 percent) and suffers triple-digit inflation (124.9 percent). Personal consumption slips by 4.2 percent. The current account balance turns negative (–$6....

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The Current Account Deficit Has Climbed above 4% of GDP
BRAZIL ECONOMICS - Report 22 Dec 2014
The current transactions account showed a deficit of US$ 9.3 billion in November, bringing the total deficit over the preceding 12 months to US$ 88.7 billion, or 4.1% of GDP, the largest proportional deficit since January 2002 (Graph 1). This large negative result reflects the current capital flo...

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Oil Prices, Full Employment and 2015 Politics
COLOMBIA - Report 22 Dec 2014
Executive SummaryThough oil prices are down 20% from their 2014 peaks, the impact on economic results this year will be limited. Recall that the Colombian price basket is around 10% lower than Brent. 2015 growth forecasts are being cut, to account for a weaker mining sector, and for lower househo...

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Oil Price Plunge a Welcome Holiday Gift
DOMINICAN REPUBLIC - Report 22 Dec 2014
Executive SummaryEconomic activity continued strong in October, with the monthly economic activity indicator turning in an output rise of 5.9% y/y. Monthly activity growth was 7.1% on average between January and October, and deviation from the average was moderate.Consumer prices fell 0.14% in No...

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Slow Motion
CHILE - Forecast 22 Dec 2014
Executive Summary In our base case scenario, the economy will grow approximately 1.7% in 2014 For 2015, uncertainty is huge and tilted to the negative side. Lately, the international scenario has become increasingly volatile, and that is dangerous for a small, open, flexible-exchange rate econ...

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The Great Divergence
TURKEY - Report 21 Dec 2014
Executive Summary The old year departs with two important political events in tow. The Constitutional Court will rule whether the 10% election hurdle is fair. We can’t handicap the ruling, but if the hurdle is struck down, a frenzied rush will be triggered to replace it with new legislation, draw...

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Cooling the Boiling Public
RUSSIA / FSU POLITICS - Report 19 Dec 2014
Falling oil prices and Western sanctions limiting access of capital to the Russian market resulted in rapid ruble depreciation, especially since they coincided with the Central Bank’s change of policies eventually allowing the free flow of the national currency for the first time in history. Occa...

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Public Perception of Political Crisis
MEXICO - Report 19 Dec 2014
Executive Summary Last week’s release of GEA-ISA’s most recent quarterly study, Mexico Politics, Society and Change: Governability Scenarios and the accompanying nationwide door-to-door survey of registered voters offers us the opportunity to look at the country’s multifaceted political and insti...

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Oil’s Toll on the Mexican Economy
MEXICO - Report 19 Dec 2014
Executive Summary One of the subjects most widely discussed in recent weeks is the abrupt plunge in oil prices and the multiple effects it will entail for both producing and consuming countries. Prices have fallen by an average of 35% to 40% from their highs of the past decade (2011), and the sim...

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Putin’s conference – no major announcements; Putin backs the Government and CBR
RUSSIA ENERGY / FINANCE - In Brief 18 Dec 2014
Today President V. Putin gave a lengthy (3+ hours long) live press-conference answering journalists’ questions on different topics. It’s a traditional event taking place since 2011 with omissions in 2008-2011 when P.Putin held the position of prime minister. Given a ‘perfect storm’ on Russian fin...

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Election Year Is Coming Up
VENEZUELA - Report 18 Dec 2014
We’re coming up on an election year. National Assembly elections are due in September 2015 but may be brought forward or pushed back by a few months. With oil revenue and public support plunging, the government will have a hard time maintaining its majority. On the other hand, it’s poised to stre...

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The U.S. – Cuba Agreement
VENEZUELA - Report 18 Dec 2014
The U.S.-Cuba agreement reconfigures hemispheric relations. It integrates Cuba to world markets and rebuilds the relationship between the U.S. and the rest of Latin America. Hemispheric relationships move closer to a relationship between peers and weaken the image of the U.S. as a colonial threat...

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CBR announced additional support for banking sector; Minfin started FX sales
RUSSIA ENERGY / FINANCE - In Brief 17 Dec 2014
Most important news for today came from Minfin and CBR. Minfin announced that it started to sell FX on the spot. In 1H14 CBR bought about $6 bln as a part of operations associated with accumulation of sovereign wealth funds. Since June there’s operation for Minfin by CBR. Overall amount of FX sal...