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SA Political Economy Dilemmas - October 2013
SOUTH AFRICA - In Brief 08 Oct 2013
The IMF Article IV puts the “cat amongst the pigeons” in South Africa’s highly charged political economy environment.  Over the past year or so, South Africa’s labour unions have raised the political and ideological temperature substantially. A blend of binding factors has been at play. Declining...

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Government Spending: Back to 2011?
PHILIPPINES - In Brief 08 Oct 2013
The Finance Department reported today that government non-interest expenditures grew 7.4% in August, significantly down from 30% the previous month and double-digit growth rates since April.  While we would like to see more data points before drawing a definitive conclusion, this slowdown may sig...

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Passing a Point of Inflection
MEXICO - Report 08 Oct 2013
Economic Panorama Last week we discussed the factors that have most contributed to the way in which the Mexican economy began to get bogged down during the first half of the year. In this edition we turn our attention to updated indicators – such as Mexico’s monthly GDP proxy (Index of Global Eco...

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Democratization Package update: Don’t Expect More, but Less
TURKEY - In Brief 07 Oct 2013
I’m asked by a lot of readers whether the recently unveiled Reform or Democratization Package heralds the return of the “pragmatic, reformist” AKP.  The answer is unfortunately NO.  In fact instead of adding to the gains by supplemental initiatives addressing the groups neglected in the first pac...

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Normalisation of Monetary Policy Continuing
INDIA - In Brief 07 Oct 2013
RBI had embarked on a messy interest rate defence of the rupee where the 91-day rate moved up by as much as 400 bps. After Raghuram Rajan took charge as Governor, some small steps were taken in normalisation.Today, the next step in normalisation took place. RBI cut the marginal standing facility ...

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Sweeten the Pot
MEXICO - Report 07 Oct 2013
Executive Summary Last week GEA-ISA published the results of its most recent quarterly survey of voter opinion, which on this occasion focused on issues related to proposed fiscal and energy reforms. The public finds little it agrees with in the structural reform proposals offered to date, with c...

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Political Insights: Week of October 7
BRAZIL POLITICS - Report 07 Oct 2013
In the economy, two highlights: the Central Bank announces its decision on the interest rate, and the IBGE releases inflation figures for September. In the Senate, we highlight the resumed discussions on the unification of ICMS and state debt, as well as the possible vote, in the Constitution and...

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Improved Trade Balance in September: Effect of the Real Exchange Rate Still Small
BRAZIL ECONOMICS - Report 07 Oct 2013
Brazil’s trade balance in September was in surplus by US$ 2.1 billion, indicating recovery. On a seasonally adjusted basis, the annualized surplus of US$ 16.4 billion is the largest since the end of last year (Graph 1). However, this result cannot be attributed to the weaker real exchange rate. G...

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Weekly Tracker: October 6-12
TURKEY - Report 06 Oct 2013
Executive Summary On the international front, there is only a remote hope of progress in the Iran vs. P5+1 negotiations, or in Syria, while Iraq is in tenterhooks. As regional conflicts spread out, contagion to Turkey through terror and ethnic strife may become more apparent. Kurds rejected the R...

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Stability Reaffirmed
RUSSIA / FSU POLITICS - Report 04 Oct 2013
Sergei Sobyanin won the Moscow Mayor’s election but with a small voter turnout, and voter support for himself only marginally higher than 50%. That may cause his position in the elite hierarchy to become less prominent. His main opponent, Alexey Navalny, won more than a quarter of the vote, despi...

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Tymoshenko Agreed to go to Germany for Treatment
UKRAINE - In Brief 04 Oct 2013
Finally we have a piece of positive news about Ukraine, the jailed former Prime Minister Yulia Tymoshenko agreed to go to Germany for treatment thus opening the way for signing EU Association agreement in November.Recall, over the last few months the main uncertainty about potential EU Associatio...

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Yasuni is Worth $18b in Present Value but What is the Net Present Value?
ECUADOR - In Brief 04 Oct 2013
As all expected, the National Assembly declared of "national interest" the exploitation of the Yasuni oil reserves.  With 108 votes against 25, legislators included blocks 43 and 31 in the document.  However, the approval excludes activities in the "intangible zone" --the area where the Tagaeri-T...

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Stability Reaffirmed
RUSSIA / FSU POLITICS - Report 04 Oct 2013
Sergei Sobyanin won the Moscow Mayor’s election but ensured a small voter turnout and voter support for himself only marginally higher than 50%. That may make his position in the elite hierarchy become less prominent. His main opponent Alexey Navalny won over a quarter of all votes despite having...

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Surprise Positive Outlook on an Expected Investment Grade Rating
PHILIPPINES - In Brief 03 Oct 2013
Moody’s raised today the Philippine government credit from Ba1 to an investment grade of Baa3, an action that would have been dismissed as long-delayed were it not for the positive outlook that came with it.  The positive outlook “reflects the expectation of continued economic outperformance by t...

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Bad Print, Lira Pass-Through Continues
TURKEY - Report 03 Oct 2013
At 0.8%, CPI-inflation came in at somewhat higher than consensus, but broadly in line with our forecast. The 12-month rate nevertheless edged down to 7.9%, from 8.2% in August, thanks to last year’s elevated base. Notably, at 0.7%, core inflation -- measured by the I-index that excludes food, tob...