Country Insights

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Muddling Along
SOUTH AFRICA - Forecast 05 Jul 2013
Executive Summary We forecast economic activity in South Africa to remain hesitant over the medium- term with inflation adjusted gross domestic product growth recording 2.0 per cent in 2013 and 2.4 per cent in 2014. Although we expect the issue of job creation to feature prominently in political ...

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Feeling Like Dorothy Again
TURKEY - Forecast 05 Jul 2013
Executive SummaryHeightened domestic political risks, combined with signals from the Fed that QE ‘tapering’ may soon begin, changed the macro environment quite significantly since our last Quarterly (of April 10, 2013). On the political front, we now anticipate the risk premiums increasing steadi...

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Game of Courts
RUSSIA / FSU POLITICS - Report 05 Jul 2013
The recent presidential announcement of the unification of Russia’s Supreme Court and the Supreme Court of Arbitration of Russia, which contradicts a previously approved strategy, may be an indication of Putin’s work on the Prime Minister’s retirement plan. Dmitry Medvedev was the architect of Ru...

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Siluanov: Federal budget revenue shortfall could exceed 1 trln RUB in 2013
RUSSIA ENERGY / FINANCE - In Brief 05 Jul 2013
Revenue shortfall in the budget in 2013 could reach 1 trillion rubles, the Finance Minister Anton Siluanov said at a government meeting yesterday. He did not rule out the need to use the Reserve Fund already this year. Major sources of the shortfall are VAT, income tax and privatization program, ...

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Ankara’s regional policy in tatters
TURKEY - In Brief 04 Jul 2013
AKP was quick to condemn the Egypt coup, and even seem to encourage the supporters of Moslem Brotherhood to resist. This may be understandable from a moral perspective, but is very likely to result in the loss of Egypt’s alliance to AKP. The coup is major blow to the Sunni Axis. According to stat...

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Budget revenues down 8.1% y/y in June
UKRAINE - In Brief 04 Jul 2013
Budget revenues declined 8.1% y/y in June, according to Treasury report on July 3rd.  That was already third month in row state collections have been sliding.  For the first six months of the year state revenues went down 0.3% y/y (against 4.9% y/y 2013 revenues plan).  Such trend confirms our vi...

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Food, transportation drive inflation higher
TURKEY - Report 03 Jul 2013
Consumer prices rose by a much higher than expected 0.8% in June, taking the 12-month rate to 8.3%, from 6.5% in May. Producer prices also rose markedly to 5.2%, y/y, from 2.2% in May.Core inflation (I-index) remained high, but unchanged at 5.6%, y/y (Table 1; Graph 1). The sharp increase in CPI ...

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Industrial Production: Investment Scenario Worsens
BRAZIL ECONOMICS - Report 02 Jul 2013
In May industrial output fell by 2.0%, more than removing the 1.8% growth the previous month and continuing the recent pattern of huge volatility in the monthly growth rates, as can be seen in Graph 1. This volatility is less pronounced in the three-month moving average, calculated on the seasona...

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2Q Economic Overview
MEXICO - Report 02 Jul 2013
Economic Panorama Background When the GDP results for the first quarter of the year showed a mere 0.8% expansion, expectations for the year were quickly scaled back. The Ministry of Finance lowered its full-year estimate from 3.5% to 3.1%, and most analysts made similar adjustments to their own f...

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Cosmo talks about the Jewish conspiracy
TURKEY - In Brief 02 Jul 2013
It is amazing how eager is the AKP government is to shoot itself in the foot. State Minister Besir Atalay suggested yesterday that the Gezi Parki is the work of Jewish Diaspora. As efforts to uncover the international conspiracy behind Gezi Parki accelerate, reports indicate that BRSA, Ergenekon ...

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Central Bank: Overoptimistic Forecasts for the Exchange Rate and Inflation
BRAZIL ECONOMICS - Report 01 Jul 2013
The quality of any forecast depends on the quality of the underlying assumptions. In the Inflation Report for June, one of the Central Bank's forecasts is that inflation in 2014 will decline to 5.4%. This result is based on the assumption that the exchange rate will remain relatively stable at R$...

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Recession with Inflation
VENEZUELA - Forecast 01 Jul 2013
Executive Summary Our outlook for 2013–2014 is gloomy. Owing to years of costly and unsustainable government policies intensified during the long lead-up to last year’s presidential vote and prolonged by regional elections, Chávez’s death, and the snap election to replace him, the economy shrinks...

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Main Topics of the Energy Sector Reform
MEXICO - Report 01 Jul 2013
Executive Summary The idea of seriously opening Mexico’s petroleum industry to private competition is a goal that has long eluded policy makers, and one about which there remains considerable public reticence. But with energy reform (along with a similarly long-denied objective of giving the gove...

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Week of July 1: Political Insights
BRAZIL POLITICS - Report 01 Jul 2013
Executive Summary President Dilma Rousseff continues negotiations with both the opposition and her base for a plebiscite on political reform. In addition, there are important topics on the congressional agenda this week. The House may vote to end the additional 10% fine in case of unfair employee...

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The PMI Remains above the Critical Mark
SOUTH AFRICA - Report 01 Jul 2013
The seasonally adjusted Purchasing Managers’ Index (PMI) nudged up to record 51.6 index points in June compared to 50.4 a month earlier (Graph 1 & Table 1). The modest rise in the headline outcome resulted mainly from monthly increases in the two heaviest weighted sub-components of the PMI – busi...