Country Insights

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In Bad Company
PERU - Report 06 Dec 2013
Executive Summary New Prime Minister Cesar Villanueva, quite successful as president of the San Martin region at eradicating coca leaf crops, has been lauded for his hands-on approach to governance. That will be a refreshing change, as Villanueva’s predecessor seemed uncomfortable with decision-m...

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Gold Smuggling and the Decline in the CAD
INDIA - In Brief 06 Dec 2013
When India brought back restrictions against legal gold imports earlier this year, there was a surge of capital and labour devoted to criminal organisations. The decline of official gold imports, from $16.5B in the June quarter to $3.5B in the September quarter, most likely went with a surge in b...

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Top-Level Individual Tasks
RUSSIA / FSU POLITICS - Report 05 Dec 2013
Putin’s personal involvement and intense economic handwringing in Ukrainian–EU relations allowed him to halt and postpone the Association agreement. However, his goal is beyond that, as Russia is trying all means to coerce Ukraine into joining the Customs Union. The Russian leadership has much ec...

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Government Spending Slows; Inflation Up
PHILIPPINES - In Brief 05 Dec 2013
Government reported today an P11.2 billion deficit in October bringing the year-to-date overall deficit to P112.5 billion, less than half the programmed P238 billion deficit for the year.  Year-on-year changes in October revenues were flat, with growth in BIR collections slowing to 11% vs. over 2...

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Guide for December 8
VENEZUELA - Report 04 Dec 2013
What’s at stake? Chavismo currently controls 85 % of the municipalities in the country (284 out of 335). In all likelihood, it will continue controlling a significant majority of municipalities after December 8. In our view, three indicators will be used to measure success in the upcoming electio...

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Industrial Production: Positive Result, But Not a Clear Recovery Trend
BRAZIL ECONOMICS - Report 04 Dec 2013
Industrial output has been extremely volatile for several months, so much so that it even appears in the 12-month rates, which by construction should behave more smoothly (Graph 1). For this reason, the short-term numbers only provide imprecise information on the trend. The data in Graph 1 show a...

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GDP: Another Frustrating Result...
BRAZIL ECONOMICS - Report 03 Dec 2013
The frustrating GDP growth in the third quarter – worse than the median of market forecasts – requires us not only to revise the projection for GDP growth in 2013, but also for 2014. The third-quarter result has made it virtually impossible to reach our previous projection of 2.5% growth in 2013....

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Mean Reversion Reigns
TURKEY - Report 03 Dec 2013
After a few bad prints of late, CPI inflation surprised favorably today, which is not that unusual historically, given the mean reverting nature of the gap between actual and forecasted inflation (Graph 1).The surprise, in turn, as it is also often the case, was driven by food prices to a large e...

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New Inklings of Growth
MEXICO - Report 03 Dec 2013
Executive SummaryThe economic data released last month mainly corresponded to September and October, and for the most part was negative. Consumer confidence slumped significantly in September (3.3 index points lower than August’s reading), and in October (2.9 points below that of September). The ...

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RSA Secures its Place among the “Fragile Five”
SOUTH AFRICA - Report 03 Dec 2013
According to a set of figures released today by the South African Reserve Bank, the current account deficit has remained in excess of 5% of GDP since 2012 (see Graph 1). This – coupled with a shortfall in the government balance as well as anemic growth – suggests that South Africa has secured its...

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RSA Secures its Place Among the “Fragile Five”
SOUTH AFRICA - In Brief 03 Dec 2013
According to a set of figures released today by the South African Reserve Bank, the current account deficit has remained in excess of 5 per cent of the gross domestic product since 2012. This – coupled with a shortfall in the government balance as well as anemic growth – suggests that South Afric...

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Much Confusion About The Energy Deal With Iraqi Kurds
TURKEY - In Brief 02 Dec 2013
Baghdad must have received solid intelligence that Ankara and Erbil did ink a broad oil and gas cooperation agreement, because it closed the airspace over Iraqi Kurdistan to Turkish flights. Energy Minister Taner Yilmaz was dispatched to Bagdad first to patch things up with his counterpart Mr. Sa...

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Political Insights: Week of December 2
BRAZIL POLITICS - Report 02 Dec 2013
A full economic agenda this week:On Tuesday, IBGE releases revised GDP results for 2012 and economic performance figures for Q3. On Thursday, the Central Bank releases the minutes of the most recent meeting of the Monetary Policy Committee. On Friday, IBGE releases November’s IPCA. In the House o...

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What Can Be Expected From Fiscal Policy?
BRAZIL ECONOMICS - Report 02 Dec 2013
Participants in the financial market have long known that at the moment the rating agencies change a country’s risk rating, the risk premiums remain virtually unchanged. Therefore, from the standpoint of their reflection on asset prices, changes in countries’ ratings are “non-events”. The reason ...

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Glimmers of Recovery
INDIA - Forecast 02 Dec 2013
Executive SummaryWe see signs of recovery after the downturn that started in 2010. Q3 data signaled improvements in output, investment and business confidence. Conditions may improve further in Q4, as the damage to Q3 growth caused by defense of the rupee recedes, and as the expansionary impact o...