Country Insights

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Unexpectedly strong IP in December (+3.9% y-o-y); the Government publishes its anti-crisis plan
RUSSIA ENERGY / FINANCE - In Brief 28 Jan 2015
Last couples of days for Russian financial markets were influenced by S&P’s decision to cut Russia’s sovereign rating below investment grade (to BB+ from BBB-). S&P cited was worsening economic outlook and weakening monetary policy flexibility as a rationale. But the decision was expected and to ...

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2014 Inflation: Puzzling Data
VENEZUELA - Report 28 Jan 2015
In the absence of BCV inflation data, we continue analyzing inflation using the household food basket data published by the Center for Documentation and Social Analysis of the Venezuelan Federation of Teachers (Cendas). This data has shown significant correlation with the NCPI food subindex. Acco...

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Economics: Weaker Economic Census Results
MEXICO - Report 28 Jan 2015
Executive Summary The National Statistics Office (Inegi) recently released the preliminary version of the results from its 2014 Economic Census. The census, conducted in 2014, collected statistical data information on the activities of business establishments during 2013. The census, which is con...

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Politics: Parties Fiddle as 2015 Campaign Looms
MEXICO - Report 28 Jan 2015
Executive Summary A major threat to the credibility of the June elections consists of the degree to which the parties act as if they are utterly oblivious to the extent to which they are held in disrepute and proceed as if all were business as usual, preoccupied by infighting and the seemingly et...

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A Boost from Abroad
CENTRAL AMERICA - Report 27 Jan 2015
Executive Summary The global economy will boost Central American economies this year.This is, first, because of the expected behavior of the U.S. economy, the most important export market for the region, and the main source of private remittances for El Salvador, Guatemala and Honduras. The secon...

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Hawkish Till February 4th
TURKEY - In Brief 27 Jan 2015
Today Governor Basci presented the first Inflation Report of the year. This year's yearend inflation estimate was revised down by 0.6 pps on the back of lower oil prices, down to 5.5% (midpoint). The key highlight of the meeting however was what the Governor said during the Q&A session: if Januar...

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Oil+ECB=Turkey Decouples?
TURKEY - Forecast 26 Jan 2015
Executive Summary After a volatile year, Turkey has had a good start into 2015, the main driver being a collapsing oil price. Indeed, there is little doubt that a sharply lower oil price, bolstered by ECB tailwinds, is a great boon for Turkey’s macro balances and offers a cyclical opportunity for...

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Under New Management
BRAZIL ECONOMICS - Report 26 Jan 2015
Executive Summary The resounding failure of the economic policy practiced between 2011 and 2014 culminated in the replacement of Guido Mantega by Joaquim Levy as finance minister, and prompted an about-face in economic policy. The diagnosis has changed and the new macroeconomic policy orientat...

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Week of January 26
BRAZIL POLITICS - Report 26 Jan 2015
Politically, this will be an intense week.President Dilma Rousseff meets with her ministerial team.She will ask for an end to public disagreements and support for the fiscal effort.Unions will strike nationally to revoke changes made to labor and social security rights.The race for the presidenci...

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Where is the Real Headed?
BRAZIL ECONOMICS - Report 26 Jan 2015
In the past several days the real has appreciated, interrupting a lengthy period of gradual weakening. At the start of the year, the exchange rate was fluctuating in the neighborhood of R$ 2.70/US$, but recently it has gotten stronger, closing last week at R$2.58/US$. The real is one of the curre...

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Weekly Tracker: January 25-31
TURKEY - Report 25 Jan 2015
Executive Summary A car bomb exploded at the gates of the hotel in Mogadishu where the Turkish delegation was staying, but we are not sure this was a message to Erdogan. For the time being, fundamentalist terror is fortunately staying away from Turkey. The impeachment vote of four ex-ministers mu...

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Devaluation 2015: Act Two
VENEZUELA - In Brief 23 Jan 2015
Maduro’s announcements on 21 January 2015 devalue the bolivar by morphing the exchange rate regime, keeping multiple exchange rates, forex controls and rationing. Arbitrage and corruption will continue marring the system. President Maduro said this regime is "temporary”. The price of the dollar r...

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Dominican Rep government placed Sovereign Bonds for USD 2.5 bn
DOMINICAN REPUBLIC - In Brief 22 Jan 2015
The government of the Dominican Republic announced that it placed Sovereign Bonds for USD 2.5 bn. USD 1 bn worth of bonds were placed with 10 years maturity at an interest rate of 5.5%, and USD 1.5 bn were placed with 30 years maturity at an interest rate of 6.85%. Average maturity of the two lot...

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Dilma’s Second Term
BRAZIL POLITICS - Report 22 Jan 2015
Fiscal Adjustment Measures adopted by the Economy Team The following is a summary table with the fiscal measures adopted by President Dilma’s economy team. Of the 11 announced acts, three were still not published in the official gazette and six still depend on legislative approval.Date Topic What...

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Waiting for the Sun
CHILE - Report 21 Jan 2015
Executive Summary Time and again, economists have revised down expected growth for 2015, this time, from 2.7% in December to 2.6% in January (Central Bank's Survey of Economists). The Imacec (monthly index of economic activity) expanded a meager 1.3% in the 12 months to November, while the yoy...