Country Insights

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GDP in the First Quarter: the Recession is Deepening
BRAZIL ECONOMICS - Report 01 Jun 2015
GDP in the first quarter of 2015 contracted by 0.2%, which was less than the consensus projections. Still, there are no reasons for optimism. On the demand side, after many years of steady growth, there was a sharp drop in household consumption, and on the supply side, besides the fall in GDP in ...

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A Pre-Election Recap
TURKEY - Report 31 May 2015
Executive SummaryOn the eve of general elections, there is fear in AKP ranks, loathing for the party among the opposition parties and an expectation of great surprises among so-called experts like us. While final polls indicate a razor-thin victory for AKP in terms of the seats, the trepidation i...

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Post-rate-cut EURHUF and declining fixed investment in Q1 point to further monetary easing
HUNGARY - In Brief 29 May 2015
1. The MNB's third cut in a row of its base rate on May 26, by another 15 bps this time and by a total 45 bps in total over the last three months, to 1.65%, has not affected the EURHUF immediately, which is no big surprise, as the move was fully in line with the broad market consensus. 2. However...

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Uprisings Damning Growth
PERU - Report 29 May 2015
Executive SummaryThe anti-mining political movement has taken maximum advantage of President Ollanta Humala's mounting unpopularity, and staging a massive protest against the construction of the Tia Maria mining project. Though the government imposed a state of emergency, and has brought relative...

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Monitoring Inflation
VENEZUELA - Report 29 May 2015
Inflation reaches new highs. We forecast the June 2015 CPI MOM inflation at 10.3 percent in June 2015, close to May (10.0 percent). The YOY rate rises to 136.3 percent from 123.7 percent in May. We have adjusted upwards our May MOM inflation rate to 10.0 percent reflecting the impact of the May m...

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Consistent with the Distribution of Political Power
CHINA FINANCIAL - Report 29 May 2015
Special points to highlight in this issue:Just as the development of China's banking system after the reforms of the 1980s was necessarily consistent with the institutions that governed its distribution of political power, expected changes in the institutions that will govern the distribution of ...

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Medina beats Fernández: reelection bid at full speed
DOMINICAN REPUBLIC - In Brief 28 May 2015
Today an agreement reached between former President Leonel Fernández and President Danilo Medina put a dramatic end to the severe crisis of the Partido de la Liberación Dominicana (PLD) which was in the verge of a division. The agreement paved the way to get approved a Constitutional amendment wh...

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Russia to the rescue?
VENEZUELA - In Brief 28 May 2015
The news that Russia plans to invest $14 billion in the Venezuelan oil industry comes in the wake of several visits to Russia by Venezuelan government officials trying to prop up relations with Russia. We have no indications of specific advances in this field. In our view, it’s a generic announce...

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PHILIPPINES - Report 28 May 2015
Even though we were poised to cut our 6.7% full-year GDP growth forecast, we were as surprised as anyone by the mediocre 5.2% 1Q15 performance of the economy. The announcement at once sent the main stock index down 1.6% in morning trade. Indeed, one can hardly miss the tone of disappointment in t...

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Growth Rebound in the Cards
INDONESIA - Report 28 May 2015
Executive Summary Growth was even lower than expected in Q1, dropping below 5% for the first time in years -- though, interestingly, business confidence is holding steady. So we may see a bit of recovery in H2. Annualized growth in Q1 was 4.71%, vs. 5.01% in Q4 2014. Low Q1 growth was expec...

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Politics: A Tale of Two Key Electoral Contests
MEXICO - Report 27 May 2015
Executive Summary Of all the states in which local elections will be held June 7, those in Nuevo León and the nation's capital have generated the most interest, and their outcomes are results that could have the greatest ramifications nationally. The contest in the northeastern state is important...

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Fernández obstructs reelection; puts him in direct collision course with President Medina
DOMINICAN REPUBLIC - In Brief 27 May 2015
In a televised speech that caused great expectation and got record audience, former President Leonel Fernández objected current attempts to reform the Constitution in order to allow President Danilo Medina to run for reelection based on moral and legal grounds. Fernández recalled that at least in...

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Economics: More Jobs but Pay Remains Weak
MEXICO - Report 27 May 2015
Executive Summary The rate of growth in payroll employment has been twice that of the general economy since the second half of 2012. That outperformance reflected a significant migration of workers in the informal sector into formal sector jobs, but the first quarter of 2015 saw growth in both fo...

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When the Going Gets Tough
COLOMBIA - Report 26 May 2015
Executive SummaryThe Central Bank is facing an unusual dilemma (for Colombia), of having to deal simultaneously with high inflation and economic slowdown. At 4.64% in April, inflation is at its highest since May 2009, mostly due to soaring food prices, and to a weaker currency. Yet the Bank recen...

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Battle at the Precipice of Default
UKRAINE - Report 26 May 2015
Fortunately there was no further military escalation in Ukraine's eastern regions in May; the action was confined mainly to skirmishes and local clashes. Public attention was instead focused on government efforts at debt restructuring, on scandals over the personnel policy of the Cabinet and on r...