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Country Insights

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More controls, distortions and corruption
VENEZUELA - Report 13 Apr 2015
The government again chose the most inefficient, cumbersome, and corruption-prone path to adjustment ahead of the December elections. Cencoex Regulation No 11 (Official Gazette No 40636 dated 04/09/2015) reinforces forex controls and rationing for travel abroad and online purchases using credit c...

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Unsustainable Forint Strength
HUNGARY - Forecast 13 Apr 2015
Executive Summary Analysts have been essentially right in their recent assessments that the Hungarian economy is likely to experience a pretty good year in 2015, with reasonably high growth, very low inflation, combined with limited fiscal deficit, a slightly decreasing government debt ratio and ...

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The Recent Exchange Rate Trend
BRAZIL ECONOMICS - Report 13 Apr 2015
During March the real reached R$ 3.30/US$, since when it has been appreciating, with a slight reduction in volatility. This movement is not unique to Brazil’s currency, indicating that part of the reason for the recent strengthening is external factors. But these elements have been accompanied by...

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Weekly Tracker: April 12-18
TURKEY - Report 12 Apr 2015
Executive Summary Our political analyst-cum-Cosmic strategist has been touring around the world on a business-cum-leisure trip, so you are stuck with me again this week. We begin by taking note of a recent election simulation that confirms what has sort of become the consensus view by now: if the...

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New output, trade and inflation data mark moderate slowdown, predict further MNB rate cut
HUNGARY - In Brief 09 Apr 2015
Industrial output (gross output in real terms) rose 5.8% yoy in February, implying 5.6% yoy growth in Jan-Feb 2015. This looks like continued decent growth. But the right comparison to see how the economy's overall growth dynamics is moving from last year is the one against 7.1% yoy expansion rec...

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Mobilizing Management Efficiency
RUSSIA / FSU POLITICS - Report 08 Apr 2015
Regional elites are under increased pressure from the Kremlin to comply with anti-corruption regulation as the country approaches a new wave of governors’ elections in September 2015, and with 18 months until the national parliamentary elections. The Presidential Administration now needs to final...

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Dilma Rousseff’s Administration
BRAZIL POLITICS - Report 08 Apr 2015
Temer chosen as government’s political articulator President Dilma Rousseff made a bold move in closing the Secretariat of Institutional Relations, headed by Pepe Vargas (PT), and transferring the responsibility for political articulation to VP Michel Temer. Political articulation is an area that...

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Inflation hasn’t peaked in yet (+16.9% y-o-y in March)
RUSSIA ENERGY / FINANCE - In Brief 07 Apr 2015
Rosstat published monthly CPI data for March. Headline figure came at +16.9% y-o-y (+1.2% m-o-m) compared to +16.7% y-o-y (+2.2% m-o-m) in February. Russian CPI by major groups, January 2012 - March 2015 While the slowdown in monthly rates is apparent, it hasn’t yet peaked in y-o-y terms. Based o...

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Growth Firming Up
MEXICO - Report 07 Apr 2015
Executive Summary The past month has produced further evidence of economic momentum and future growth potential, while also revealing unexpected weaknesses.Since September, the monthly GDP proxy (IGAE) shows the economy growing at its natural pace of 2.5% to 3% of GDP. January’s report extended t...

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The absurd theater of the AIIB
CHINA FINANCIAL - Report 06 Apr 2015
Special points to highlight in this issue: Investors seem to be increasingly acknowledging that the world suffers from a structural excess of savings over desired private investment, and it is this excess that was responsible for the excess consumption during the bubble years and the weak demand ...

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Week of April 6
BRAZIL POLITICS - Report 06 Apr 2015
This will be a busy week. The House may vote on the bill regulating outsourcing of labor. The Petrobras CPI hears PT Treasurer João Vaccari Neto. The Senate discusses fiscal incentives, and the index for state debt is also on the agenda, but voting on both matters is likely to be postponed.Expect...

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Corruption Probes Overshadows Focus on Economic Performance
PANAMA - Report 06 Apr 2015
Executive Summary Corruption probes continues to broaden: more than dozen former government officials private contractor have been investigated for overcharging, conspiracy and bidding manipulation, since the Varela administration began. According to some estimates, the cost of these frauds could...

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The Labor Market: New Trends
BRAZIL ECONOMICS - Report 06 Apr 2015
After several years of unemployment rates near historical lows along with rising real wages, the Brazilian labor market has started to show clear signs of weakening. The recent uptick in joblessness is a consequence of the sharp economic deceleration, and has been accompanied by smaller wage incr...

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Politics in a Time of Stagflation
TURKEY - Report 05 Apr 2015
Executive Summary A nation-wide blackout combined with two DHKP-C terror attacks inspired theories of “powers that be” that are trying to destabilize Turkey at the eve of general elections. We don’t subscribe to these theories, but won’t rule out Assad and Turkey’s National Intelligence Agency as...

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Food and I: No Room for Complacency
TURKEY - Report 03 Apr 2015
March CPI inflation came in markedly worse than expected (1.2% vs. 0.9%), lifting the 12-month rate slightly to 7.6%, but – once again – that is because of a pretty bad food inflation print.The 12-month PPI inflation edged up a little, albeit from a low base. Core inflation – as measured by the m...