Country Insights

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Foreign Exchange Rate Uncertainty
MEXICO - Report 19 Nov 2014
Executive Summary The volatility that has swept international markets in recent weeks in response to the sluggish levels of growth expected in Europe and China has taken a significant toll on the peso relative to the US dollar. Although the shift in the exchange rate of recent weeks was pronounce...

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Indonesia : Jokowi’s Bold Move
INDONESIA - In Brief 19 Nov 2014
In less than a month in office, Indonesian new President made a bold move by raising the domestic fuel price. The price of subsidized gasoline was increased from Rp. 6,500 per liter to Rp. 8,500. The price of subsidized diesel oil was also increased from Rp. 5,500 to Rp. 7,500 per liter. With tha...

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Economic Performance Stellar, while Corruption Weakens Fernández
DOMINICAN REPUBLIC - Forecast 18 Nov 2014
Executive Summary Economic performance couldn’t be better. GDP growth in 2014 through Q3 was outstanding, climbing to 7%, from 3.7% last year. The numbers were positive across sectors. Inflation was estimated at 2.83%, nearly half the level of the same period of 2013; we expect it to end 2014 ben...

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Political Insights: Week of Novemeber 17
BRAZIL POLITICS - Report 17 Nov 2014
Ministerial reform and the Petrobras scandal will be the main topics on this week’s political agenda.Another important topic is the discussion in Congress to change the primary surplus goal for 2014.President Dilma Rousseff returns this week after participating in the G20 meeting in Australia. Ho...

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Modest Rebound Likely
PERU - Forecast 17 Nov 2014
Executive SummaryInitial growth expectations for 2014 by both analysts and government authorities have fallen from 5.5% to 6% to the 3% area, which we still consider optimistic. We believe Q4 growth will be about 2% y/y, compared to 1.8% for Q3. We see 2014 growth at just 2.5%.More worrisome is t...

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Retail Sales Still in the Doldrums
BRAZIL ECONOMICS - Report 17 Nov 2014
Real retail sales expanded in September, both in the restricted concept (0.4%) and in the augmented one, which includes cars and construction materials (0.5%). With this, augmented sales in the third quarter shrank 1.9%. It was a smaller fall than in the second quarter (-3%), but household consum...

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Labor Disunion and Fiscal Risks
SOUTH AFRICA - Report 17 Nov 2014
The recent expulsion of the National Union of Metalworkers of South Africa (NUMSA) from the Congress of South African Trade Unions (COSATU) could be the harbinger of intense inter-union competition as well as an escalation in industrial relations instability in South Africa. As things stand curre...

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FX mortgage loans to households will be converted into HUF at market exchange rates
HUNGARY - In Brief 16 Nov 2014
Fact: Just as we completed our November monthly, the government announced the rules for the upcoming conversion of FX-denominated mortgage loans by banks to households into HUF. Essentially, these loans (currently EUR10.8bn or HUF 3350bn, which will likely fall to EUR 8bn at net value, following ...

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Gasoline price hike on the horizon, again
VENEZUELA - In Brief 14 Nov 2014 4 responses
President Maduro seems to be paving the way towards a gasoline price hike. In his November 13 speech announcing three bills aimed at promoting the communes and supporting the misiones, Maduro placed the topic on the public agenda. He said the price will rise in the right moment (“in the remainder...

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Shifting Sands
PHILIPPINES - Forecast 14 Nov 2014
Executive SummaryOnce again, greater uncertainty is spreading through world financial markets as players are forced to feel their way through changing monetary policy stances in advanced economies. Our baseline view of above 6% GDP growth for 2014 and 2015 is based on expectations that external d...

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Inflation rises to 70 percent in October
VENEZUELA - Report 14 Nov 2014
In the absence of BCV inflation data, we continue analyzing inflation using the food basket data published by the Center for Documentation and Social Analysis of the Venezuelan Federation of Teachers (Cendas).We estimate that the month-on-month National CPI inflation accelerated to 6.3 percent in...

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GDP grew 0.7% y-o-y in 3Q14; no recession in 2014
RUSSIA ENERGY / FINANCE - In Brief 13 Nov 2014
According to preliminary estimates from Rosstat, Russian GDP increased 0.7% y-o-y in 3Q. Economy was flat on seasonally adjusted quarterly basis. This means that economy didn’t plunge into recession in 3Q. Even assuming zero economic growth for 4Q14, yearly figure will be at 0.5-0.7% growth. It’s...

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Slumping Oil and Public Finance
MEXICO - Report 12 Nov 2014
Executive Summary A series of recent economic indicators suggested a degree of activity during the third quarter shy of what most analysts had been projecting, albeit a firmer level than we witnessed early in the year. Median market estimates of GDP growth for full-year 2014 slipped to 2.3% in Ba...

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Security and Rule of Law Top the Agenda
MEXICO - Report 12 Nov 2014
Executive Summary Last week the authorities announced two major developments in the case of the 43 Ayotzinapa students. The first was the arrest of the two top suspects in the case: the former mayor of the city where the students “disappeared”, along with his politically powerful wife. Although i...

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Growth Rate Is Lower Than Targeted
CHINA - Forecast 10 Nov 2014
Executive Summary Our growth projection for 2014 falls between the government’s 7.5% forecast, and the lower projection of our pessimistic peers: we foresee 2014 growth at 7.4%. Though GDP grew 7.3% y/y in Q3, down just 0.2 pps from Q2, China’s main economic indicators suggested that the true ...