BRAZIL ECONOMICS - Report 18 May 2015

The market is reacting to the signals sent by the Central Bank and expects a continuing increase in the interest rate. Last week the yield curve indicated that the market expects the SELIC rate to be raised by 50 basis points at the next COPOM meeting, and that this would not be the last hike. Af...

BRAZIL POLITICS - Report 18 May 2015

The fiscal austerity measures remain on the political agenda. The House may vote on the bill on payroll tax exemptions and on MP 668/15 (PIS and Cofins for imports). In the Senate, analysis of MP 665/14, on unemployment insurance and salary bonuses, is on the agenda. By Friday, the government ...

BRAZIL ECONOMICS - Report 18 May 2015

Executive Summary Brazil has entered a recession in which, because of the high inflation and the need for fiscal adjustment, the authorities cannot use counter-cyclical measures. And unlike the recession of 2008-2009, the country cannot count on an impulse from abroad either. With the apprecia...

TURKEY - Report 17 May 2015

Executive Summary

With three weeks left to the ballot date, opinion polls mostly reflect the political bias of the polling company, rather than the reality. We stick to our forecast of a weak AKP victory, with HDP making it to the parliament. Yet, it is quite possible that voters are...

PHILIPPINES - Forecast 14 May 2015

Executive Summary

The government of Benigno Aquino is heading towards its last year in office basking in glowing reviews about the resilience and growth potential of the economy.As the din characteristic of pre-election Philippines grows louder, many wonder whether they will see a mo...

MEXICO - Report 13 May 2015

Executive Summary

In keeping with the recovery seen in internal consumption of recent months, bank credit for durable goods purchases increased in each of the first three months of 2015 and in the process capped a 14-month long contraction in the availability of such loans. However,...

HUNGARY - Report 13 May 2015

Executive Summary

Preliminary Q1 2015 GDP (+0.6% qoq, +3.1% yoy sda) was slightly down from last year but growth is still running at relatively high pace, due to strong consumer demand and impressive export data. The government’s 2015 GDP forecast has been raised to ...

MEXICO - Report 12 May 2015

Executive Summary

Over the course of an eight-year government offensive against drug trafficking, the structure of organized crime has morphed and fragmented considerably. Gone are almost all of the drug cartels of yesteryear and in their place have emerged myriad criminal gangs tha...

CHILE - Report 12 May 2015

Cabinet shuffles are common in Chile. Indeed, most cabinets do not survive a president’s first year of office intact. In that sense yesterday’s cabinet shuffle comes as no surprise and may even be seen as slightly overdue.

BRAZIL POLITICS - Report 11 May 2015

The House votes on another fiscal austerity measure: MP 664/14 (pension and sick leave). In the Senate, the appointment of Luiz Edson Fachin to the Supreme Court will be analyzed. On Friday, President Dilma may launch the concessions program, an attempt by the government to implement a positiv...

INDIA - Report 11 May 2015

In Y. V. Reddy's period as governor (6/Sep/2003 to 5/Sep/2008), there was vigorous pursuit of exchange rate policy. In an attempt to defend the dollar, RBI purchased a lot of foreign assets and paid for this using rupees. These rupees distorted domestic monetary policy. At a time of the bigges...

BRAZIL ECONOMICS - Report 11 May 2015

From the way things are going now, nobody doubts that the Brazilian economy is entering a recession period. The doubt (and worry) is over how deep and how long the downturn will be. Although the recession will not be as deep as that in 2008-2009, it will probably be a good deal more persistent. N...

TURKEY - Report 10 May 2015

Executive Summary

Turkish election campaigns have mutated into a three-way mudslinging match between AKP-MHP and HDP, while CHP has been marketing hugely expensive populist promises. We have a large number of polls, but they don’t increase our comfort with predictions.HDP is hovering...

RUSSIA / FSU POLITICS - Report 08 May 2015

Yet another rotation, with a federal minister’s going into the Presidential Administration and a regional governor’s becoming a federal minister, shows that Putin is firmly standing by his principle of rewarding loyalty above all else, and even more so if there is external pressure. Even certain ...

RUSSIA ENERGY / FINANCE - In Brief 07 May 2015

Russian inflation has finally stabilized. CPI data for April showed long-awaited decline in inflation. Consumer prices increased 16.4% y-o-y (+0.5% m-o-m) compared to 16.7% y-o-y (+1.2% m-o-m) in March....