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Fiscal Adjustment
BRAZIL POLITICS - Report 17 Jun 2015

TCU will postpone trial of government accounts

The TCU (Federal Court of Accounts) will wait one month for President Dilma Rousseff to provide clarification in writing on the accounting maneuvers used to balance her government accounts in 2014. Only after this formality is completed ...


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Confidence under Strain
SOUTH AFRICA - Report 17 Jun 2015

Despite some outbursts of optimism, confidence among businesses and consumers in the South African economy remains by and large depressed. On a combined basis, this has largely been the case since 2012. Under this regime, growth prospects for South Africa are uninspiring. The prevailing state ...


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CBR cut key rate by 100 b.p. as expected; 1Q15 GDP revised down to -2.2% y-o-y
RUSSIA ENERGY / FINANCE - In Brief 15 Jun 2015

CBR’s Board of Directors decided today to cut key rate by 100 b.p., from 12.5% to 11.5%. The move was lar...


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​More questions about Turkey’s politics
TURKEY - In Brief 15 Jun 2015

Once again I want to use the opportunity of astute questions asked by a reader to share my views with the entire readership. As usual the name of the inquirer shall remain anonymous.

· Can the president block formation of a...


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Week of June 15
BRAZIL POLITICS - Report 15 Jun 2015

Another important week for the fiscal austerity effort. President Dilma sanctions MPs 664 and 665, which make changes to labor rights. There may be questioning in the STF. In the House, the government tries for a vote on the bill that deals with payroll tax exemptions. The TCU analyzes governm...


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Constitutional amendment definitively approved. Re-election allowed.
DOMINICAN REPUBLIC - In Brief 15 Jun 2015

In a second and definitive vote, last Friday the National Assembly approved to amend the Constitution. The amendment allows an incumbent President to be nominated for a second term and forbids him/her to run for President again ever. In a formal ceremony that took place on Saturday, the Ass...


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The Monetary Tightening Continues
BRAZIL ECONOMICS - Report 15 Jun 2015
In the minutes of the last COPOM meeting, the Central Bank once again signaled that the cycle of raising the SELIC rate would continue. Although acknowledging the weakening of the labor market and deceleration of economic activity, concern over the strong inflation in recent months prompted the a...

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I have waited so long
CHILE - Report 15 Jun 2015
Executive summary How long are we going to wait for economic activity to go up, inflation to go down, and the Central Bank to start normalizing rates? The latest National Accounts show the economy on a seeming acceleration path. Even though this is good news, there are a few caveats to take...

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Weekly Tracker: June 14-20
TURKEY - Report 14 Jun 2015

Executive Summary

An air of unreality surrounds the nation, with pundits trying to convince us that coalition formation would be easy, as parties shut the door to any compromise. Unless reality sets in and each party makes very unpleasant sacrifices, early elections are more likely. W...


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MNB Policy: Defying Headwinds
HUNGARY - Report 12 Jun 2015

Executive Summary

The MNB stepped up efforts to ease policy over the past month. In late May, it cut the base rate by another 15 bps to 1.65%, and then in early June, it announced quantitative easing through a reform of its regulatory instruments and mechanism, effective late September...


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IMF relaxes on debt restructuring
UKRAINE - In Brief 12 Jun 2015

It looks like on debt restructuring everything develops in line with our expectations. The IMF mission arrived in Kyiv and was pretty much pleased to see serious progress on many directions. Reforms a...


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Week of June 11
BRAZIL POLITICS - Report 11 Jun 2015

Issues regarding the relationship between the Legislative and Executive remain on the agenda this week. Congress will discuss presidential vetoes, changes in procedures for provisional measures and the compulsory budget. President Dilma, after a trip to Portugal, announces measures for the ...


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Liquid reserves boosted by SDRs
VENEZUELA - In Brief 10 Jun 2015 2 responses

Blanca Vera reported today in El Nacional Web that BCV drew $1.5 billion from the IMF in recent days. This news would confirm our hypothesis that BCV sought funds to shore up foreign reserves ahead of the $798 million decline on June 3. Otherwise, li...


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Economics: Cost-push and further peso spike
MEXICO - Report 10 Jun 2015

Executive Summary

The depreciation and volatility that the Mexican peso has experienced in relation to the dollar since late last year is something that one would be ill-advised to try to minimize.

As is widely known, much of the peso's recent depreciation (and volatility) is e...


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Growth: Good Headline, Poor Dynamics
TURKEY - Report 10 Jun 2015

GDP growth came in at 2.3%, y/y, in the first quarter of the year, better than both the consensus (1.6%, CNBC-e) and our even weaker (1%-1.5%) forecasts. But this hardly changes the fact that the underlying growth dynamics or momentum remains weak. It looks like private consumption drove growt...