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Russian macro: Combined 2020-21 budget plan reasonable, external balance stable – expect unhurried growth
RUSSIA ECONOMICS - Report 14 Oct 2020
The Finance Ministry announced that both oil and gas revenues and revenues not associated with this industry continued to rebound in September, with VAT and excise taxes accounting for the bulk of non-oil and gas revenues, pointing to a continued gradual rebound of the economy. In 9M20, the go...

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US and Russia close to agreement on START
RUSSIA / FSU POLITICS - In Brief 14 Oct 2020
On October 14 the US said it had almost concluded an agreement with Russia on the Strategic Arms Reduction Talks (START) Treaty on nuclear weapons. The current START runs out in February 2021. The US is content to extend the current START. They want Russia to stop modernizing and expanding its ar...

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The Path of the Fiscal Dominance and Another Downgrade
BRAZIL ECONOMICS - Report 13 Oct 2020
In April 2008, S&P promoted Brazil to investment grade. Since 2000, the country had been maintaining primary surpluses that were big enough to reduce the debt/GDP ratio. In 2015, after the government had totally abandoned this commitment, and sent a budget bill to Congress with a primary deficit,...

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OFZ: Borrowing Plan 2021 looks realistic, but implies extra risks for Minfin
RUSSIA ECONOMICS - Report 13 Oct 2020
The Russian government has set a new annual record for domestic borrowing: it raised more than R3 trln on the open market year to date (the FY19 figure was slightly above R2 trln). Domestic local banks brought the lion’s share of demand, in contrast to the previous year, when international player...

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Federal budget deficit moderate in September as expenditure growth didn’t impress yet
RUSSIA ECONOMICS - In Brief 13 Oct 2020
The Finance Ministry announced that both the oil-and-gas revenues and revenues not associated with this industry continued to rebound in September as total revenues exceeded R1.5 trln (versus around R1.3 trln in July and August each month). In 9m20, total revenues reached R13.2 trln, including ov...

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Russia’s foreign debt decreased as the ruble weakened
RUSSIA ECONOMICS - In Brief 13 Oct 2020
The Russian Central bank reported that the country’s total foreign debt decreased from January 1 to October 1by over $30bn to around $461.2. Sovereign debt shrank by over $10bn to around $59.4bn – largely on the back of the weakened ruble, which affected the value of the ruble-denominated bonds h...

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Municipal elections stall Congress and other weekly topics
BRAZIL POLITICS - Report 13 Oct 2020
Due to the October 12 holiday and the municipal elections, this will be an empty week in Brasília, without any relevant votes in the House or Senate. Supreme Court Minister Celso de Mello retires on Tuesday, October 13. On Thursday, the Central Bank will release the IBC-Br (GDP preview) for Augus...

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Covid-19 weekly update - week ending October 11
CHINA ADVISORY - Report 13 Oct 2020
October 1 through 8 was China’s Golden Week, when families gather to celebrate the holidays and presumably spend money. Despite the holiday period, though, consumer spending was relatively flat. Bloomberg did point out some positive trends, including higher major retail and catering enterprise sa...

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We expect the fiscal deficit to reach 12% GDP this year, debt/GDP: 74%
ISRAEL - In Brief 13 Oct 2020
In September, the fiscal deficit reached 14.9bn ILS compared to 1.9bn in September of last year. The deficit/GDP ratio in the LTM reached 9.1%, from 8.1% last month and 3.7% in 2019.In the first nine months of the year, non-Covid related expenditure increased by only 0.9% y/y, while Covid related...

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Economics: PPP Infrastructure Plan, good news but uncertainty remains
MEXICO - Report 12 Oct 2020
President Andrés Manuel López Obrador along with the Business Coordinating Council (CCE) released a text last week entitled Actions and Projects for Supporting the Economic Recovery confirming 39 infrastructure projects that are supposed to contribute to reactivating the country´s economy. Th...

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Politics: More of the opposition starts to move
MEXICO - Report 12 Oct 2020
A National Anti-AMLO Front, better known as Frenaa, has emerged by default as the main public expression of opposition to López Obrador’s administration, thanks to the paralysis and irrelevance in which opposition parties remain engulfed. Over the past four months, the front has organized ever la...

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OMAN: VAT law decree issued and bond now likely this week
GULF COUNTRIES - In Brief 12 Oct 2020
Sultan Haitham just issued Royal Decree 121/2020 for the VAT Law. We are trying to get hold of a copy of the final draft. News reports say it will begin in "six months" which we are guessing means 1 April, but have yet to confirm this (OO). When parliament approved the law six weeks ago it recomm...

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The lack of a coherent fiscal policy could support a negative rating outlook
ISRAEL - Report 12 Oct 2020
• The Director General of the MoF, Karen Turner, announced her resignation yesterday, five months after her appointment • The lack of a coherent fiscal policy and a general political instability could support a negative rating outlook. • Economic growth continues to suffer from the second closu...

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President of Tajikistan re-elected
RUSSIA / FSU POLITICS - In Brief 12 Oct 2020
On October 11 Tajikistan announced that President Emomali Rahmon was re-elected with 91% of the vote. The presidential term is 7 years. 4 virtual unknowns ran against him and garnered almost no media attention. The media is entirely state controlled. Turnout was 855. The economy is suffering badl...

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Kyrgyzstan appoints a new PM but some refuse to recognise him
RUSSIA / FSU POLITICS - In Brief 11 Oct 2020
On October 10 parliament elected Sadyr Japarov as a prime minister. Only days ago he was rescued from prison by a crowd of hundreds. He was there for kidnapping. This comes after a disputed parliamentary election. Since Japarov as freed a court overturned his conviction. Some politicians say he i...