Country Insights

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Fundamentals vs. Rabbits
TURKEY - Presentation 26 Sep 2017
Turkey’s risk profile is set to rise gradually, probably culminating in a series of elections to begin by mid-2018. Growth this year has been saved, but in the absence of new “tricks” or “rabbits” it is likely to slow next year to around 3%.

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Politics: Presidential Ratings Near Rock Bottom
MEXICO - Report 25 Sep 2017
The latest GEA-ISA nationwide poll of registered voters shows President Enrique Peña Nieto’s disapproval ratings have reached historical highs as the public displays a deep sense of pessimism about how things are likely to evolve in the election year. The administration might possibly glean sn...

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Week of September 25
BRAZIL POLITICS - Report 25 Sep 2017 1 response
The second PGR accusation against President Michel Temer begins its progress in the Lower House. The rapporteur will be chosen on Tuesday, September 26. The Lower House and Senate will also vote on Political Reform proposals. Congressmen will try to reach a deal with the Ministry of Finance on th...

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How much equity capital is needed for India’s banks?
INDIA - Report 25 Sep 2017
In a banking crisis, banks are over-leveraged. We use historical experience to identify certain levels of leverage, which we claim are normative values for the maximal permissible leverage of a bank. We work out the additional equity capital that should go into Indian banking in order to achieve ...

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The Rise of the Tourism Industry
INDONESIA - Report 25 Sep 2017
The tourism industry has become another prime mover of the Indonesian economy. Long experiencing relatively slow growth, the industry has gotten increasing attention from the new government. In fact, optimism abounds that in the next few years, the tourism industry will become one of the largest...

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Economics: Pros and Cons of Revised NCPI
MEXICO - Report 25 Sep 2017
In light of the need to regularly update how inflation surveys are conducted to in order to better track consumers’ actual consumption patterns – reflecting changes in consumer preferences for products and services, their availability and relevance to consumers, the sorts of venues in which the p...

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New Indications on Monetary Policy
BRAZIL ECONOMICS - Report 25 Sep 2017
Against a backdrop of anchored inflation expectations and a negative output gap, the Central Bank has induced a decline of the market real interest rate below the neutral level. The indication in the most recent Inflation Report is that the SELIC rate can remain stable for a long period – probabl...

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A failed (and unconstitutional) attempt to modify ACP’s budget: Beyond Barria’s case
PANAMA - Report 25 Sep 2017
Article 220 of Panama's Political Constitution asserts that The Panama Canal Authority (ACP) will present its budget proposal to the Cabinet, which in turn is subject to Congress for its examination, approval, or rejection (Chapter 2, Title 9 of the Panamanian Constitution). This is the basis of ...

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How Far Does Moreno Want To Go?
ECUADOR - Report 25 Sep 2017
The ongoing animosity between President Lenin Moreno and former president Correa and the evident lack of support of a majority of legislators still loyal to Correa is a direct threat to the stability and success of this government. However, it has also opened an interest opportunity for More...

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Winter Is Coming
TURKEY - Report 24 Sep 2017
The referendum by Iraqi Kurds, assuming it is held, doesn’t pose a major threat to Turkey’s unity, but its aftermath is almost certain to require Turkish involvement in Iraqi affairs in unpleasant ways. Turkey’s descent into the Middle Eastern “event horizon” will accelerate as Turkish Forces mak...

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Did the MNB get what it wanted this week?
HUNGARY - In Brief 23 Sep 2017

Well, no one can ever be sure, but we think it largely did. But what was it actually they wanted?

What they did is well-known, yet a short summary might be useful:

1. They cut their inflation forecast quite sharply. Even though they still expect headline CPI-inflation to reach the ...

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Rains from Hurricane María leave damages well beyond expectations in the East and Northeast
DOMINICAN REPUBLIC - In Brief 22 Sep 2017

As expected, Hurricane María did not hit directly the DR territory but dropped massive amount of water in the East and Northeast of the country.

The damages are well beyond expectations. Severe flooding have ocurred in densily populated areas of Duarte, María Trinidad Sánchez, El Seybo,...

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Waiting for the 19th Party Congress
CHINA FINANCIAL - Report 22 Sep 2017 1 response
Special points to highlight in this issue: • Economic activity continues to slow in China, according to the most recent monthly data, and credit continues to accelerate, pretty much in line with what we expected. We have to be very careful, however, about how we interpret the economic activity d...

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The Reserve Bank Defies Market Expectations - No Interest Rate Cut
SOUTH AFRICA - Report 21 Sep 2017
At its previous meeting in July 2017, the SA Reserve Bank’s Monetary Policy Committee cut the benchmark interest rate for the first time in five years. Today the MPC decided not to change the repo rate and kept it at 6.75%. South Africa’s inflation has been moderating since the beginning of t...

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Tax reform: down to the wire?
PHILIPPINES - In Brief 21 Sep 2017

The Senate ways and means committee submitted last night its version of the tax reform package, authored by 14 of 22 active senators. We gather that Senate bill 1592 is very different from both the DoF proposal and the lower house's version, in terms of both the included policy changes as wel...