Country Insights

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MPC: Cut and Paste, Wait and See
TURKEY - Report 23 Oct 2013
As expected, the Monetary Policy Committee left all rates (weekly policy as well as the O/N rates; see graph) and all other policy levers unchanged today. The wording of the statement was literally a carbon copy of the September statement (click here for this and here for the previous statements....

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Medium Term Budget Policy Statement (Mini-Budget): 23 October 2013
SOUTH AFRICA - In Brief 23 Oct 2013
In his Medium Term Budget Policy Statement, the SA Minister of Finance walked a tight rope, made all the right moves and repeated messages of political support for the National Development Plan.  He was ever-conscious of the importance of macroeconomic stability, given the country’s twin deficits...

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MPC: No Action, No Change in Wording...
TURKEY - In Brief 23 Oct 2013
Today’s MPC decision made no changes in rates or other instruments. The wording was almost exactly the same as well. There should be no market impact.  A more detailed brief will be available later today.

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Industrial Decoupling’s Future
MEXICO - Report 23 Oct 2013
Executive Summary The most significant news on the economic front last week was the Chamber of Deputies’ vote to pass its version of the 2014 Revenue Law. Changes to tax laws include the levying of a 5% tax on junk food (fruit-flavored candies, chocolates, chips or crisps, gelatins, ice cream, an...

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Political Insights: Week of October 21
BRAZIL POLITICS - Report 21 Oct 2013
A busy week: Once again the Confaz will try to make an agreement for the unification of the ICMS.The government may also edit an MP on goodwill accounting in cases of mergers and acquisitions among companies in the same group. In the House of Representatives, congressmen will try to conclude the ...

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Oil Boosts Finances; the President Makes Threats
ECUADOR - Report 21 Oct 2013
Executive Summary The oil sector delivered mixed news in Q3. Crude oil production rose by 15,000 barrels per day in January-August 2013, from 2012.This fact, plus a high average oil price of $97.91 per barrel, helped to boost crude oil exports 2.7% y/y, from $8.717 billion to $8.950 billion. Yet ...

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Only Moderate Growth of Consumption, Despite Positive Signals
BRAZIL ECONOMICS - Report 21 Oct 2013
Growth of retail sales in the restricted sense (excluding cars and construction materials) was surprisingly strong again in August. Graph 1 shows that in the quarter through August, these sales expanded at an annualized pace of 10.5%, showing continued strong acceleration in relation to the first...

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Tariff Freeze Winners and Losers
RUSSIA ENERGY / FINANCE - Report 19 Oct 2013
Executive Summary Next year, for the first time in 15 years, the Russian government will freeze gas, electricity and rail transport tariffs. The so-called “inflation minus” formula will drastically alter the rules for setting regulated tariffs over the medium term. Although this could trigger a d...

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Battered from Many Fronts
SOUTH AFRICA - Forecast 18 Oct 2013
Executive Summary We maintain our previous forecast for subdued economic activity in South Africa over the medium-term, with inflation adjusted gross domestic product growth recording 2.0 percent in 2013 and 2.4 percent in 2014. The labor market is poised to remain weak as we expect companies to ...

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Continued Higher Remittance Growth
PHILIPPINES - In Brief 16 Oct 2013
The BSP reported today continuing above-forecast growth in remittances from Filipino workers overseas.  Personal remittances, which include transfers in cash or in kind, continued to exceed $2 billion for the fifth consecutive month in August, equivalent to a 7.4% yoy growth.  The bulk of this co...

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PKK leader Ocalan Criticizes Peace Process, but Fails to Order New Action
TURKEY - In Brief 16 Oct 2013
Despite the Id of Sacrifice, Turkish politics is in full swing.  A team of pro-Kurdish BDP representatives visited incarcerated leader Ocalan on 15 October who sounded extremely disappointed with the Reform Package and the progress of the Peace Process. Ocalan repeated his well-known demands.   M...

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Room for Improvement
MEXICO - Report 15 Oct 2013
Executive Summary The Chamber of Deputies is facing an October 20 deadline for passing its version of the 2014 Revenue Law. While no one can predict the final details of that bill, the extent of opposition to new tax proposals suggest that both the administration of President Enrique Peña Nieto a...

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Retail Sales in the Restricted and Augmented Senses with Different Behavior
BRAZIL ECONOMICS - Report 15 Oct 2013
In August, real retail sales in the restricted definition once again came as a positive surprise, with seasonally adjusted growth of 0.9% (+2.1% in July). However, sales in the augmented concept, which includes cars and construction materials, were much weaker. The 12-month rates constructed from...

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New Budget, Same Old Problems
DOMINICAN REPUBLIC - Report 15 Oct 2013
Executive SummaryAggressive tightening in September produced the desired result: interest rates stopped falling, the weakening currency rebounded to early August levels and inflation stopped accelerating. (September inflation was 0.49%; accumulated 2013 inflation through September was 3.57% and y...

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Economic Policy Changes: What is the Importance?
BRAZIL ECONOMICS - Report 14 Oct 2013
Executive Summary The Central Bank indicated there will be one more increase of 50 basis points in the SELIC rate. The 12-month forward-looking inflation expectations stand at 6.2%, and assuming a neutral real interest rate between 4% and 5%, the SELIC rate would have to be raised higher than 10....