Country Insights

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Week of June 15
BRAZIL POLITICS - Report 15 Jun 2015
Another important week for the fiscal austerity effort. President Dilma sanctions MPs 664 and 665, which make changes to labor rights. There may be questioning in the STF. In the House, the government tries for a vote on the bill that deals with payroll tax exemptions. The TCU analyzes government...

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Constitutional amendment definitively approved. Re-election allowed.
DOMINICAN REPUBLIC - In Brief 15 Jun 2015
In a second and definitive vote, last Friday the National Assembly approved to amend the Constitution. The amendment allows an incumbent President to be nominated for a second term and forbids him/her to run for President again ever. In a formal ceremony that took place on Saturday, the Assembly ...

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The Monetary Tightening Continues
BRAZIL ECONOMICS - Report 15 Jun 2015
In the minutes of the last COPOM meeting, the Central Bank once again signaled that the cycle of raising the SELIC rate would continue. Although acknowledging the weakening of the labor market and deceleration of economic activity, concern over the strong inflation in recent months prompted the a...

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I have waited so long
CHILE - Report 15 Jun 2015
Executive summary How long are we going to wait for economic activity to go up, inflation to go down, and the Central Bank to start normalizing rates? The latest National Accounts show the economy on a seeming acceleration path. Even though this is good news, there are a few caveats to take...

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Weekly Tracker: June 14-20
TURKEY - Report 14 Jun 2015
Executive Summary An air of unreality surrounds the nation, with pundits trying to convince us that coalition formation would be easy, as parties shut the door to any compromise. Unless reality sets in and each party makes very unpleasant sacrifices, early elections are more likely. We shall get ...

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MNB Policy: Defying Headwinds
HUNGARY - Report 12 Jun 2015
Executive SummaryThe MNB stepped up efforts to ease policy over the past month. In late May, it cut the base rate by another 15 bps to 1.65%, and then in early June, it announced quantitative easing through a reform of its regulatory instruments and mechanism, effective late September. The latter...

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IMF relaxes on debt restructuring
UKRAINE - In Brief 12 Jun 2015
It looks like on debt restructuring everything develops in line with our expectations. The IMF mission arrived in Kyiv and was pretty much pleased to see serious progress on many directions. Reforms are gradually moving on disregard incredible resistance. What more, it looks like the general situ...

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Week of June 11
BRAZIL POLITICS - Report 11 Jun 2015
Issues regarding the relationship between the Legislative and Executive remain on the agenda this week. Congress will discuss presidential vetoes, changes in procedures for provisional measures and the compulsory budget. President Dilma, after a trip to Portugal, announces measures for the Minha ...

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Liquid reserves boosted by SDRs
VENEZUELA - In Brief 10 Jun 2015 2 responses
Blanca Vera reported today in El Nacional Web that BCV drew $1.5 billion from the IMF in recent days. This news would confirm our hypothesis that BCV sought funds to shore up foreign reserves ahead of the $798 million decline on June 3. Otherwise, liquid reserves would have fallen to $10 million....

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Economics: Cost-push and further peso spike
MEXICO - Report 10 Jun 2015
Executive Summary The depreciation and volatility that the Mexican peso has experienced in relation to the dollar since late last year is something that one would be ill-advised to try to minimize. As is widely known, much of the peso's recent depreciation (and volatility) is explained not only b...

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Growth: Good Headline, Poor Dynamics
TURKEY - Report 10 Jun 2015
GDP growth came in at 2.3%, y/y, in the first quarter of the year, better than both the consensus (1.6%, CNBC-e) and our even weaker (1%-1.5%) forecasts. But this hardly changes the fact that the underlying growth dynamics or momentum remains weak. It looks like private consumption drove growth i...

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Monetary Policy Where It Belongs
PHILIPPINES - Report 09 Jun 2015
Executive SummaryThe BSP has been telling markets that it will be moving into an interest rate corridor approach in implementing monetary policy. The plan, expected to be in place by early next year, will involve first putting in place a new deposit auction system to augment existing liquidity ma...

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Politics: First Analyses of the Electoral Results
MEXICO - Report 09 Jun 2015
Executive summaryThere were no changes in the relative weights of the three main parties in Congress. However, the amount of votes they gathered has diminished constantly and importantly. The coalition PRI-Green party will not have a majority in the Chamber of Deputies: based on available data, t...

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Continuing With the Adjustment Despite the Costs
BRAZIL ECONOMICS - Report 08 Jun 2015
Executive Summary There's no way to escape from the costs of the fiscal adjustment under way in Brazil. Besides sharp declines in industrial production and fixed capital investments, to name just two components of GDP, the unemployment rate is trending upward and real wages downward. The reces...

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Week of June 8
BRAZIL POLITICS - Report 08 Jun 2015
Several important events are scheduled for this week. There are expectations regarding the infrastructure package, which will be announced by President Dilma Rousseff on Tuesday, June 9. The House resumes the debate on political reform and discusses payroll tax exemptions. The PT holds its party ...