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Country Insights

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Fernández obstructs reelection; puts him in direct collision course with President Medina
DOMINICAN REPUBLIC - In Brief 27 May 2015

In a televised speech that caused great expectation and got record audience, former President Leonel Fernández objected current attempts to reform the Constitution in order to allow President Danilo Med...


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Economics: More Jobs but Pay Remains Weak
MEXICO - Report 27 May 2015

Executive Summary

The rate of growth in payroll employment has been twice that of the general economy since the second half of 2012. That outperformance reflected a significant migration of workers in the informal sector into formal sector jobs, but the first quarter of 2015 saw growt...


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When the Going Gets Tough
COLOMBIA - Report 26 May 2015

Executive Summary

The Central Bank is facing an unusual dilemma (for Colombia), of having to deal simultaneously with high inflation and economic slowdown. At 4.64% in April, inflation is at its highest since May 2009, mostly due to soaring food prices, and to a weaker currency. Yet th...


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Battle at the Precipice of Default
UKRAINE - Report 26 May 2015

Fortunately there was no further military escalation in Ukraine's eastern regions in May; the action was confined mainly to skirmishes and local clashes. Public attention was instead focused on government efforts at debt restructuring, on scandals over the personnel policy of the Cabinet and o...


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Week of May 26
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 ...


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Perspectives for 2015: Recession and Political Costs
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...

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Big Facts about the US Macroeconomic Environment and Implications for India
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 c...


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A Sharp Slowdown in Q1 2015 GDP Growth
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 pre...


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South Africa's Macroeconomic Challenges Deepen
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 Minist...


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Still slow
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 ...


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GUATEMALA: Upset Ahead?
CENTRAL AMERICA - Report 25 May 2015

Executive Summary

Guatemalan 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,...


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More Signs of the Size of the Recession
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...

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Fiscal Adjustment: Another Step, But Still Short of What’s Needed
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...

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Weekly Tracker: May 24-30
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-electio...


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Improvement of outlook on Hungary's BB+ by Fitch Ratings puts policy pressure on the government
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 Fitc...