Country Insights

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Week of November 3
BRAZIL POLITICS - Report 03 Nov 2015
The 2015 primary surplus target and the 2016 Budget are the highlights in Congress. Nelson Barbosa will send a document to Congress with an additional R$ 26 billion in cuts for 2016. In the House, there will be another attempt to vote on the repatriation bill. The rapporteur for the case against ...

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A Strong External Adjustment
BRAZIL ECONOMICS - Report 03 Nov 2015
Unlike in many past crises faced by Brazil, the current one does not involve a balance of payments problem. Contrary to the several past episodes, Brazil now has a high level of international reserves and is experiencing a substantial decline in its current account deficit. In past crises, such a...

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Politics leads the headlines. The economy maintains a steady pace.
PANAMA - Report 03 Nov 2015
Economic growth continues but at a slower pace, according to the Monthly Index Economic Activity (IMAE), which grew 3.8% in August and experienced a 4.0% increase during the first eight months of the year compared with 2014. Transportation, financial intermediation and construction are the sector...

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Inflation: Food Down, Core Up
TURKEY - Report 03 Nov 2015
Consumer prices rose by 1.55%, m/m, in October broadly in line with expectations. This has reduced the 12-month rate to 7.6% from 7.9% in September, thanks to the base effect from last year’s markedly higher food prices. The latter eased to 8.7%, y/y, from 10.7% in September. D-PPI also fell to 5...

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Growth May Revive in Mid-2016
CHINA - Forecast 02 Nov 2015
We expect growth to be low but stable, with the already-loose monetary and fiscal policy leading to strengthening. We therefore foresee a growth rebound in mid-2016. Meanwhile, GDP growth and fixed asset investment both fell in Q3, and producer prices fell further, continuing to deflate. GDP was ...

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Back to Single Party Government
TURKEY - In Brief 01 Nov 2015
Hi All: Murat here, filling in for Atilla Yesilada, sharing very briefly his first impressions on today’s AK Party victory. Facts: According to the preliminary results, AK Party won, quite unexpectedly, some 49% of the votes, winning around 312 seats in parliament, up from 258 in June (see table ...

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Another political arrest: will it become fatal mistake for Poroshenko?
UKRAINE - In Brief 31 Oct 2015
Breaking news was released on Saturday morning. The authorities arrested Gennadiy Korban, one of the leaders of political party UKROP (funded by Igor Kolomoysky). Officially he was blamed in organizing criminal group. In reality, the main crime of UKROP was their result on mayor’s elections in Dn...

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The State of the South African Economy
SOUTH AFRICA - Report 30 Oct 2015
One of the signs that was held up by some students during the October 2015 protests by university students in South Africa read “Our parents were sold dreams in 1994 – we are here for a refund”. This message captures not only the lack of confidence that students clearly have in the state of South...

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Rebound in Capital Flows
INDONESIA - Report 30 Oct 2015
In the past few weeks, we have seen a return of capital inflows into the Indonesian financial system, both in the stock and the bond market. Such a return led to a significant strengthening of the Indonesian currency. Aside from the impact of lowering import prices, the strengthening of the curre...

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CBR keeps rates unchanged
RUSSIA ENERGY / FINANCE - In Brief 30 Oct 2015
As we have expected CBR’s Board of Directors decided today to keep rates on hold ‘given significant inflationary risks’ but hinted on future cut at December meeting. We think that the decision on the cut will be based mainly on October-November CPI data. Disinflationary hopes of CBR are based mai...

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We expect no move from CBR tomorrow
RUSSIA ENERGY / FINANCE - In Brief 29 Oct 2015
CBR’s Board of Directions will have another meeting on monetary policy tomorrow. Bloomberg survey is split between those expecting CBR to hold rates and those expecting 50 b.p. While acknowledging that there’s more rationale for the cut compared to September meeting we expect CBR to stand still t...

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The government is selling its 5% stake in OTP today
HUNGARY - In Brief 29 Oct 2015
The government is selling its whole 5% ownership stake in OTP through a market auction today, in a step that was not announced previously. The revenue collected was HUF75bn or 0.24% of GDP. Cabinet minister Lázár said this move will not affect the government's target to keep at least 50% of the b...

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​Massa’s very explicit “implicit support” for Macri
ARGENTINA - In Brief 29 Oct 2015 2 responses
Without mentioning Macri or Alianza Cambiemos,.Sergio Massa expressed yesterday UNA’s positions ahead of the ballotage on November 22nd. Throughout the press conference, Massa and his main political allies, such as De la Sota and Lavagna, made it clear that they would not support the official can...

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Economics: Lower House Passes Revenue Bill
MEXICO - Report 29 Oct 2015
The Chamber of Deputies last week passed the government’s proposed Federal Revenue Law for 2016 and in the process made a few changes. One of the most significant alterations involved the expected average foreign exchange rate. It was raised to 16.40 pesos to the dollar from the 15.90 level the o...

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Politics: A Tale of Four State Elections
MEXICO - Report 28 Oct 2015
The electoral calendar was shaken up late last week as the Federal Electoral Tribunal decided to annul the gubernatorial elections held in the Pacific Coast state of Colima last June, in which the incumbent PRI edged out the PAN by a mere 0.17% of the vote. The tribunal cited evidence that the cu...