BRAZIL POLITICS - Report 26 May 2015

A politically busy week in Brasília: The House tries to vote on political reform, and in the Senate, the fiscal austerity measures are the focus of the agenda. Mayors from across the country will meet in Brasília to discuss the federative pact, healthcare and education. On Friday, May 29, the IBG...

BRAZIL ECONOMICS - Forecast 26 May 2015

Executive Summary The political costs of the fiscal adjustment and the measures to control inflation are being carried by a weakened government. The recession in 2015 and the outlook for very modest growth in 2016 have put the administration in the trap of having to undertake a more drastic fi...

INDIA - Report 26 May 2015

Using very long time series in the US, three important facts are: (a) an inflation target of 2%, which is successfully delivered by the US Fed; (b) bond returns of 2.7% and (c) equity premium of 3 percentage points.In the US, there is a fair understanding about these three numbers and confidence ...

SOUTH AFRICA - Report 26 May 2015

According to Statistics South Africa's official figures released today, the inflation adjusted (real) gross domestic product (GDP) increased at a muted quarterly, seasonally adjusted and annualized rate of 1.3 per cent in the first quarter of 2015. This follows a notable improvement in the preced...

SOUTH AFRICA - In Brief 26 May 2015

Today's Real GDP growth of 1.3% together with a material increase in the country's already high unemployment rate have worsened the macroeconomic outlook. The Minister of Finance was hoping for an annual rate of 2% for 2015, at this rate this budgeted figure is fading away fast. The Minister may ...

PHILIPPINES - In Brief 26 May 2015

Government finally released yesterday its expenditure report for 1Q15 validating our suspicion that it failed to spend as much as it had planned. The report showed non-interest expenditures rising 6.3% yoy, slightly faster than the last two quarters but below the double-digit growth rate of 1Q14....

CENTRAL AMERICA - Report 25 May 2015

Executive SummaryGuatemalan political turmoil is so acute that some local analysts doubt that President Otto Pérez Molina will make it to the end of his term.On the heels of the resignation of Vice President Roxana Baldetti over the corruption scandal in the Tax Administration Office, some civic ...

BRAZIL ECONOMICS - Report 25 May 2015

In announcing last week the spending cuts necessary for the fiscal adjustment, the government revealed that its revenue projections are based on a GDP contraction of 1.2% in 2015. This is the "consensus forecast" of the most recent Focus survey published by the Central Bank. But a comparison betw...

BRAZIL ECONOMICS - Report 25 May 2015

In the attempt to meet the fiscal surplus commitment for 2015, the government has recently announced budget contingencies – in reality cuts – adding to R$ 69.9 billion. These will affect all discretionary spending categories, mainly investments, with cuts of R$ 25.7 billion in the Growth Accelera...

TURKEY - Report 24 May 2015

Executive Summary The recent batch of poll data indicates that the two heroes of the election, namely AKP and HDP are stalling, while the main opposition party CHP has gained momentum. Based on the new data and our momentum analysis, we revised our election estimates and post-election scenarios. ...

HUNGARY - In Brief 23 May 2015

There can be few things on the face of the Earth that the Hungarian government want more than getting back their investment grade credit rating. Once again, they did not get it yesterday, as Fitch Ratings issued a press release on Hungary, but they got a big step closer to the goal, as Fitch anno...

UKRAINE - In Brief 22 May 2015

After parliament approved the law, which allows the Cabinet to impose a moratorium on debt repayment, an active discussion started on potential moves of the Cabinet. In essence, all observers agree that this law was just to add pressure on creditors; however, there is no consensus on what the Cab...

SOUTH AFRICA - Report 22 May 2015

The South African Reserve Bank (SARB)’s Monetary Policy Committee (MPC) voted in favour of maintaining the repo rate at the prevailing level of 5.75 per cent a year (see Graph 1). Graph 1 Core, headline inflation and repo rates, South Africa, 2009 Jan – 2015 May* Source: SARB and PAIRSNote: *2009...

VENEZUELA - Report 22 May 2015

Yesterday, May 21, the price of the dollar in the parallel market broke the barrier of 400 bolivars per dollar in one of the sources we monitor. The average of the five sources we follow jumped 10.7 percent in the day, 25.2 percent in the week, 34.7 percent in the first three weeks of May, 123.1 ...

CHINA - Report 22 May 2015

Executive Summary With an abrupt single day’s notice, the Central Bank on May 11th cut its benchmark interest rates for loans and deposits by 25 bp, and expanded the floating interval from 1.3 times interest rates to 1.5 times. These measures came in response to new weak growth data. We expect mo...