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COUNTRY INSIGHTS

​Second budget amendment reestablishes a fiscal deficit of 3% of GDP in 2021
DOMINICAN REPUBLIC · In Brief · 18 Nov 2021

The government sent to Congress a second amendment to the Public Budget for 2021. The amendment reflects a substantial improvement in the government's projected revenues for 2021, 8.3% higher than the amount projected in the first budget amendment for 2021. There is also a 1.4% increase in expend...

The Precatórios PEC continues to be negotiated in the Senate, the rapporteur of the income tax bill should submit a separate bill on the issue next week, and the CCJ of the House approved the payroll tax exemption bill
BRAZIL POLITICS · Report · 18 Nov 2021

According to the rapporteur, Fernando Bezerra, there is pressure in the Senate to make the R$ 400 Auxílio Brasil payments permanent in the Precatórios PEC. The goal is to enact at least part of the proposal, even if the other part returns to the House for further analysis. Senator Angelo Coronel ...

Unusually big rate hike from the MNB
HUNGARY · In Brief · 18 Nov 2021

The MNB has just announced that it will pay an 2.5% interest rate on the 1-week deposits placed with it at today's tender. This represents a 40bps increase compared to the new level of the base rate, as set two days ago, and a full 70bps increase from last Thursday's tender.The fact that the 1-we...

Damn the torpedoes, full speed ahead
TURKEY · In Brief · 18 Nov 2021 · 2 responses

The Monetary Policy Committee defied the ongoing pressures on the TL, and cut the policy rate (weekly repo) by another 100 bps today to 15% (simple), broadly in line with expectations, including ours. The statement ends with the following cryptic sentence: "The Committee expects that the transito...

Russia’s 3Q21 GDP growth is in line with expectations, while elevated inflation boosts nominal GDP numbers
RUSSIA ECONOMICS · In Brief · 18 Nov 2021

Rosstat published its flash estimate of the 3Q21 y-o-y GDP growth (4.3%), which appeared in line with expectations and didn’t challenge the view that in 2021 as a whole Russia’s GDP will grow by around 4.2%. Rosstat provided no more details on the 3Q21 GDP. No breakdown of growth by sectors, no s...

Gazprom increases supply to the EU but Belarus cuts it
RUSSIA / FSU POLITICS · In Brief · 17 Nov 2021

On November 16 the Russian gas major declined to book extra pipeline capacity for December. That is the third consecutive month that Gazprom has done this. The EU says that Moscow is manipulating scarcity to drive up the price. There is an argument that Russia would like to take advantage of high...

The CCJ of the House votes on Dep. Freitas’s report on the extension of the payroll tax exemption, Sen. Bezerra has confirmed that the Senate will change the Precatórios PEC, and the new Auxílio Brasil payments will be issued today
BRAZIL POLITICS · Report · 17 Nov 2021

After being put to a vote in the CCJ, the payroll tax exemption bill will go to the Senate. President Jair Bolsonaro has announced his support for extending the exemption for another two years. Depending on the change to the Precatórios PEC, the text may have to return to the House. But even if i...

​Mid-week update: Cracks surface in Republic Alliance, Kilicdaroglu promises mutual forgiveness
TURKEY · In Brief · 17 Nov 2021 · 2 responses

As the Turkish Lira heads for Hades, the percolating political debate might have something to do with at least corporates buying more FX. I shall share my personal views on the exchange rate, but politics, too is heading for a four-car-pile up on the highway, which takes precedent. I must explain...

Watching the recovery – household data remains weak
INDIA · Report · 16 Nov 2021

The pandemic has largely subsided, google mobility data is close to pre-pandemic conditions, and a nice export boom is in place. But the view of household data is concerning. Household data shows a weak recovery after the peak of the second wave in May 2021. The Indian labor market is mostly a cl...

Now The Ball is in The Central Bank’s Court
BRAZIL ECONOMICS · Report · 16 Nov 2021

Although Precatórios PEC destructed the fragile fiscal framework, the reactions of the foreign exchange and interest rate markets have been moderately positive. The explanation is cynically simple: “It could be worse”. With this, the Real appreciated, closing last week at R$5.45/US$, and at the l...

GDP growth misses expectations in Q3 with +2.4% y/y amid record-high grain harvest
UKRAINE · In Brief · 16 Nov 2021

The state statistics office reported 2.4% y/y GDP growth in Q3. The result is far below expectations. The NBU just a few weeks ago estimated a 4.0% y/y GDP increase for the third quarter. Poor industry performance (near-zero growth through the quarter), as well as sluggish agro production (+7.2% ...

The MNB raised 30bps... or maybe more (?)
HUNGARY · In Brief · 16 Nov 2021

The Monetary Council held its monthly rate-setting meeting in a difficult situation, but its decision largely met the challenge.In response to the nearly runaway mode inflation took in October, the MNB took the following decisions:1. It raised the base rate and the interest rate corridor by 30bps...

Issues surrounding President Bolsonaro's affiliation with the PL arise, the CAE should analyze the bills presented by Sen. Jean Paul Prates and Sen. Nelsinho Trad, and the MP that created the Auxílio Brasil program will expire in about three weeks
BRAZIL POLITICS · Report · 16 Nov 2021

Bolsonaro’s affiliation with the PL was scheduled for November 22, but yesterday he said that he hopes to resolve the issues in two or three weeks. Bolsonaro is against an alliance with the PSDB in the state of São Paulo. The Economic Affairs Committee (CAE) of the Senate will analyze the report ...

Germany suspends certification of Nord Stream 2
RUSSIA / FSU POLITICS · In Brief · 16 Nov 2021

On November 15 Berlin said it cannot continue the process until a German company is established to manage the pipeline. Nord Stream 2 AG is a Swiss-registered company that currently owns the pipeline. The company can establish a German subsidiary, and that will satisfy Germany's demand. The asset...

Q3 GDP growth moderately below analyst forecasts
HUNGARY · In Brief · 16 Nov 2021

GDP growth for Q3 has been reported at 0.7% qoq, 6.1% yoy on seasonally and day-adjusted basis this morning. In two domestic polls, the analyst median expectation was 7.2 and 7.4% yoy. Our own forecast was 6.8% yoy.Even though no breakdown was given by KSH, as usual with first estimate GDP report...

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