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Country Insights

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Headline CPI-inflation to have risen sharply in December
HUNGARY - In Brief 12 Jan 2020
The December CPI-inflation data will be released on Tuesday. On this occasion, the yoy headline rate is likely to rise sharply, to 3.9% from November's 3.4% and October's 2.9%, essentially due to a sizeable base effect related to fuel prices. Please, kindly take note that the MNB is unlikely to r...

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Ukraine-Iran tensions
RUSSIA / FSU POLITICS - In Brief 12 Jan 2020
On January 11 Iran admitted accidentally shooting down a Ukrainian International Airlines plane a week ago. Iran had initially denied being responsible. Half of the 173 people aboard were Iranians. Iran has enough enemies and has no reason to provoke Ukraine. Russia and Ukraine have both suspende...

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All relatively calm on the Turkish front
TURKEY - Report 12 Jan 2020 1 response
It was a relatively quiet week in Turkey, for a change. After the Erdogan-Putin summit on the 8th of January, twin ceasefires were declared in Syria’s Idlib Province and by the warring parties in Libya. Yet, there is no guarantee that the fragile calm will last in either place. December-Januar...

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Weekly highlights: Higher bond issuance in 2019 was offset by stronger consumer savings
ISRAEL - In Brief 12 Jan 2020
The fiscal deficit reached 3.7% GDP in 2019. The deficit level has been stable during the past few months. The deficit overshot target by 12bn, with spending overshooting the original budget by 2.8bn and revenues below target by 9.2bn.We expect the deficit to remain at a similar level in 2020, an...

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​IRAN: Admission of guilt for downing plane is a risk-off development
GULF COUNTRIES - In Brief 11 Jan 2020
For three days, Iran insisted that the crash of Flight 752 to Ukraine on Wednesday was due to mechanical error, despite the coincidence of it happening just hours of Iran’s counterstrike on US bases in Iraq. This was maintained despite mounting evidence and accusations from Canada’s prime ministe...

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OMAN: Sultan Haitham should be well prepared to address fiscal challenges
GULF COUNTRIES - In Brief 11 Jan 2020
Oman's bizarre and untested succession system, set up by Qaboos to reduce the risk of rivals (after he’d deposed his father), was supposed to involve three days of deliberation by the Royal Family Council, during the period of official mourning, and only if they could not agree would two letters ...

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​OMAN: Succession will be credit-positive
GULF COUNTRIES - In Brief 10 Jan 2020
A month ago, when Sultan Qaboos checked out early from a specialist hospital in Belgium we said it seemed likely that it had been determined that his cancer was untreatable and he had returned to Oman to die. Sadly, this prediction proved accurate, despite state TV claiming that he was in a stabl...

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Ukrainian inflation at 4.1%
RUSSIA / FSU POLITICS - In Brief 10 Jan 2020
On January 9 the Ukrainian Statistics Agency announced that inflation in Ukraine is now at 4.1%. This is a marked improvement over 2018 when it averaged 9.8%. It is also better than in 2017 and 2016.

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Russian internet company seeking to provide telephone services
RUSSIA / FSU POLITICS - In Brief 10 Jan 2020
Yandex is planning to offer phone services. On January 9 it was reported in Kommersant that Yandex is thinking of functioning as a virtual operator. This would be linked to music and films which Yandex also links to. The company does not expect to turn a profit from this but to widen its client b...

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Gulf weekly: Iran counterstrike, Kuwait and Bahrain GDP data
GULF COUNTRIES - Report 10 Jan 2020
The weekly is a skimmable summary of key developments by country, overlaid with our analysis and links to further information. Headlines include: * Iran’s limited counterstrike on US forces in Iraq seemed to be a signal of de-escalation. * Iraq’s parliament voted to expel US troops. * MBS’s ...

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China’s half-hearted stimulus
CHINA ADVISORY - Report 10 Jan 2020
China is entering 2020 with a weak response to the economic decline. Beijing is accepting slower growth as one of the casualties of avoiding excessive investment that would lead to inefficient growth and the potential for financial systemic risk. However, in place of a substantial monetary or fi...

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Rates remain on hold and the bias remains dovish
ISRAEL - In Brief 10 Jan 2020
As expected, the BoI left the rate unchanged, but the interest-rate announcement came in a little bit more dovish than expected. The announcement stressed the low-inflation environment and the difficulties to return inflation back to the target range amid the strengthening of the shekel. The use ...

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Central government cash deficit slightly below target in full-year 2019
HUNGARY - In Brief 09 Jan 2020
The central government's cash deficit was announced by the Finance Ministry today at HUF 453bn for December and HUF 1219bn for full-year 2019, the latter down from HUF 1445bn in 2018. This means a deficit of 2.6% of GDP last year, just slightly below the 2.7% target figure and more significantly ...

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Inflation slows to 4.1% ytd in 2019, much below the targeted level
UKRAINE - In Brief 09 Jan 2020
CPI slowed to 4.1% ytd or 7.9% y/y in 2019 down from +9.8% ytd or +10.9% y/y a year ago, beating any projections for the year. The NBU aimed +6.3% ytd but now consumer inflation is more than 2ppt below the target. Falling transportation prices (-2.4% ytd vs. +12.9% ytd in 2018), sliding utilities...

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Happy new year?
PHILIPPINES - In Brief 09 Jan 2020
First, the good news. Government has a new P4.1 trillion budget which President Duterte signed into law early this week. This would normally be par for the course but, following last year’s delayed budget that became a major drag on economic growth, is clearly a positive development. Public spend...