Country Insights

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Gulf weekly: Rouhani-Trump could meet, Abu Dhabi may issue and Aramco looks to Tokyo
GULF COUNTRIES - Report 01 Sep 2019
It was another busy week politically in the region, with a further uptick in tensions in Lebanon and Yemen (not to mention Palestine, in the run-up to Israeli elections and the Kushner peace plan), but also unexpected openness to a possible US-Iran detente (we're skeptics). At a time when regiona...

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The month of Syria
TURKEY - Report 01 Sep 2019
Ankara is in trouble in Syria once again. This time it is different, because Erdogan can get along neither with Putin, nor the US (ex-Trump). Bad-case scenarios such as sanctions, clashes with Kurds and Assad’s Army in Idlib dominate our crystal ball. At home, Erdogan is feeling the pressure f...

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Tax break for Russian LNG company
RUSSIA / FSU POLITICS - In Brief 01 Sep 2019
On August 30 it was announced that Novatek (Russia's second biggest LNG extractor) has been granted a USD 597 million tax break. This is to incentivize building a part in the Arctic nar Gydan. Putin supports this effort. He sees the Arctic as the key region for economic growth. This port will als...

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The National Treasury proposes selling Eskom’s coal powered plants to reduce debt
SOUTH AFRICA - Report 30 Aug 2019
The Finance Minister, Tito Mboweni, has in the past remained quite vocal about the fiscal stress the country’s State-Owned Entities (SOEs) have placed on the economy, especially Eskom. The embattled power utility has not only been struggling to keep lights on, but has also been unable to meet its...

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Our new projections reflect a slow first semester and a difficult fiscal situation
PANAMA - Forecast 30 Aug 2019
The NFPS results for the first two quarters of 2019 showed what the new administration will have to deal with in the second half of the year: large deficits as a result of lower revenues and higher expenditures. The net position of the NFPS (-US 2,317 million) doubles the amount of the same perio...

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Ways the National Welfare Fund may be spent in 2020
RUSSIA ECONOMICS - Report 30 Aug 2019
Russian authorities have been discussing options for spending the National Welfare Fund (NWF). The NWF had reached $124.1 billion by the beginning of August, due to government current account transfers of last year’s FX purchases ($66.6 billion). As the liquid part of the NWF (currently $98.8 bil...

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Volatility of the real, interventions and capital flows
BRAZIL ECONOMICS - Report 30 Aug 2019
This Report has two objectives. The first is to present clear evidence that the behavior of the real is very volatile, justifying the Central Bank’s interventions trying to smooth out the exchange rate fluctuations. The theme of these interventions – and the recent change of the intervention inst...

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OMAN: Fiscal deep dive 1: H1 performance won’t be sustained
GULF COUNTRIES - Forecast 30 Aug 2019
H1 fiscal numbers were surprisingly good thanks to one-off gains including the lagged impact of the 2017 income tax law and higher 2018 oil prices, a surge in investment income, and the sale of a stake in Khazzan gasfield. However, this will not be sustained in H2, when seasonal trends mean there...

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Notes from Beijing
CHINA ADVISORY - Report 30 Aug 2019
After several days attending meetings in Beijing among senior officials, along with Chinese and western journalists, the top areas of concern are the Hong Kong protests, the slowing economy, and in last place, the Trade War. De-risking the financial system remains a top priority, despite pressure...

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Ukraine and Russia negotiate exchange of prisoners
RUSSIA / FSU POLITICS - In Brief 30 Aug 2019
Both Ukraine and Russia have confirmed that they are negotiating an exchange of prisoners. On August 30 Ukraine stated that the negotiations are not yet complete. They are eager to secure release of 24 Ukrainian sailors arrested in November 2018. There is rumor that these sailors have been releas...

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Encouraging appointments, concerns on Interior Minister
UKRAINE - In Brief 29 Aug 2019
New parliament started active work today. As expected, Oleksiy Honcharuk, Deputy Chief of Staff of the President Office was appointed as new Premier. Oksana Markarova kept her post of Finance Minister. Tymofiy Milovanov, Honorary President of Kyiv School of Economics, was appointed Minister of ec...

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EURHUF reached a record high today
HUNGARY - In Brief 29 Aug 2019
The EURHUF exchange rate reached an historic record high at 331.85 today, against which it has recovered a bit in later trade. The forint has never been this weak; so far its record low was last summer's short-lived 330.8 level.Almost immediately, the MNB was asked for comment by Reuters, but the...

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Saudi unlikely to let Lebanon default (yet)
GULF COUNTRIES - In Brief 29 Aug 2019 1 response
Lebanese bonds and CDS are under rising pressure as tensions with Israel have added to the country’s domestic woes.We put a probability of Gulf support at about 70%, most likely from Saudi Arabia. The current sell-off could offer a good opportunity to buy into Lebanese bonds, which would partiall...

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Russia's shadow economy is 13% of GDP
RUSSIA / FSU POLITICS - In Brief 29 Aug 2019
An analysis of official data on August 28 concluded that 13% of Russia's GDP is made up of the shadow economy. The shadow economy consists of unofficial salaries, peer to peer sales and other informal economic activities. This is not about crime. The analysis was performed by RBK one of Russia's ...

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IMF-induced “voluntary” debt restructuring?
ARGENTINA - In Brief 29 Aug 2019 2 responses
Economic Minister Hernan Lacunza announced yesterday, after the market closed, that the executive is going to implement active debt management to voluntarily extend the maturity of short-termed and medium-termed public debt, allegedly without a hair cut on capital or interest.Below we summarize t...