Country Insights

Gsp in brief thumbnail
The Central bank keeps prime rate unchanged at 12.5%
UKRAINE - In Brief 14 Sep 2017

Today the Central bank left prime rate at 12.5%. Mounting inflationary risks stand behind this decision. In August State Statistics reported deflation (CPI dropped 0.1% m/m); however, the price decline was very modest, much less than the Central bank anticipated. As a result, for 8m 2017 CP...

Gsp in brief thumbnail
50 b.p. cut is expected tomorrow based on record low inflation
RUSSIA ENERGY / FINANCE - In Brief 14 Sep 2017

We share a widely held consensus view that tomorrow 50 b.p. cut from CBR will follow. On July meeting CBR decided to stand still largely influenced by spike in inflation in June (+1.2% m-o-m after seasonal adjustment). But as the following inflation data showed, it was just temporary. In Augus...

Gsp report report thumbnail
The Current Account Deficit Rises Despite Further Widening of the Trade Balance
SOUTH AFRICA - Report 14 Sep 2017
​The deficit on the South African current account balance widened from R91 billion in the first quarter of 2017 to R110 billion in the second quarter, raising the deficit as a percentage of GDP from 2% to 2.4%. Examining the two main components of the account, a similar trend to that of the first...

Gsp report report thumbnail
It’s Tight, But Is It Tight Enough?
TURKEY - Report 14 Sep 2017
As expected, the CBRT’s Monetary Policy Committee (MPC) kept all short-term rates unchanged today (one-week repo rate at 8.0%, O/N lending and borrowing rates at 9.25% and 7.25%, respectively; and LLW rate at 12.25%; see chart). Recall that the Bank has been keeping average and marginal funding r...

Gsp in brief thumbnail
A quick preview of the Monetary Council meeting on September 19
HUNGARY - In Brief 13 Sep 2017

The Monetary Council is to hold its monthly rate-setting meeting, complicated a bit by the discussion of the MNB's Q3 inflation report next Tuesday (September 19). What makes this event interesting despite the somewhat boringly stubborn stability of the Council's long-held easing bias is a set...

Gsp report report thumbnail
Politics Takes to the Streets
PERU - Report 12 Sep 2017
Recent political developments have proven challenging for the Kuczynski administration. Though its relations with Congress calmed in August, a real commitment to working on an even minimal common reform agenda seems lacking. There’s general impression of a weak government unable to administer rou...

Gsp in brief thumbnail
Compounding SA Political Economy Uncertainties
SOUTH AFRICA - In Brief 12 Sep 2017

This year may well turn out to be SA’s most critical year for the country’s short to medium term socio-political trajectories. The ANC is in the midst of electioneering for its December 2017 Elective Congress. Irrespective of the outcome of the Elective Congress, the results w...

Gsp in brief thumbnail
A Storm in a Glass: Mikheil Saakashvili returns to Ukraine
UKRAINE - In Brief 12 Sep 2017

I did not plan to disturb our readers with the story of Saakashvili return but developments appeared to be extremely noisy.

So, at the end of July President Poroshenko deprived Mikheil Saakashvili, his former comrade, Ukrainian citizenship. The move did not make much sense since Saaka...

Gsp report report thumbnail
Week of September 11
BRAZIL POLITICS - Report 11 Sep 2017
Rodrigo Janot’s last week at the PGR – he is expected to present a new accusation against President Temer in the next few days. The Lower House tries to conclude a vote on Political Reform. Former President Lula testifies before Judge Sérgio Moro. Last week, former Minister Antonio Palocci provid...

Gsp report report thumbnail
Inflationary Shock
VENEZUELA - Report 11 Sep 2017
On 7 September, president Maduro decreed this year’s fifth minimum wage increase, retroactive to 1 September. The minimum legal income rose by 30 percent, with a 40 percent increase in the minimum wage and 24 percent increase in the food bonus. This year to date, the minimum income has risen by 2...

Gsp report forecast thumbnail
The Return of Growth: But How Strong?
BRAZIL ECONOMICS - Forecast 11 Sep 2017
In the midst of risks posed by the difficulties of executing the fiscal adjustment and vagaries of the political crisis, the positive contribution of monetary policy deserves attention. The SELIC rate should continue falling, to 7% at the end of the year, when inflation will be 3.2%, well below t...

Gsp report report thumbnail
Economics: Survey Hints at Lower Poverty
MEXICO - Report 11 Sep 2017
Mexico’s National Statistics Institute updated our understanding of trends in household income and spending, as well as the dynamics of poverty, with the release of its bi-annual National Survey of Household Income and Spending (ENIGH). Unfortunately, the latest report, which was based on data co...

Gsp report report thumbnail
Will the SELIC Rate be 7% at the End of the Easing Cycle in December?
BRAZIL ECONOMICS - Report 11 Sep 2017
At the last COPOM meeting, the Central Bank cut the SELIC rate by 1 percentage point, but made it clear that smaller cuts will occur at subsequent meetings. The market consensus – and our estimate – is that the SELIC rate will reach 7% in December. But will this be the end of the cycle? On the on...

Gsp report report thumbnail
Politics: Potential Shakeups for 2018 Scenarios
MEXICO - Report 11 Sep 2017 1 response
The first hours of the fall session of Congress got off to a rocky start as internal factional strife in one party became enmeshed in a broader dispute over whether the current attorney general would continue to preside over the prosecutorial branch of the criminal justice system for the next nin...

Gsp report report thumbnail
Construction, Exports Drive Q2 Growth
TURKEY - Report 11 Sep 2017
Turkish economy expanded at a broadly expected 5.1% rate in Q2, y/y, after a similar performance in Q1 (of a slightly upwardly-revised 5.2%). In quarterly/sequential terms, growth accelerated to 2.1% in Q2, up from previous quarter’s 1.3% rate. On the expenditure side, based on year-on-year d...