Country Insights

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Stuck on Political Reform
MEXICO - Report 12 Nov 2013
Executive Summary With just over a month to go before the current session concludes, Congress has little to show for its efforts other than progress on budget and tax policy. And although lawmakers are well behind schedule in addressing crucial structural reform issues that the major parties had ...

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Political Insights: Week of November 12
BRAZIL POLITICS - Report 12 Nov 2013
The Friday, November 15, holiday means reduced activities in Congress. In the House, we highlight the vote on the Internet Framework Law. In the Senate, the first round vote on the compulsory budget may be concluded. The Federal Supreme Court (STF) analyzes the Mensalão case on Wednesday and Thur...

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Russian GDP grows 1.2% y-o-y in 3Q
RUSSIA ENERGY / FINANCE - In Brief 12 Nov 2013
According to preliminary Rosstat estimates, Russian GDP expanded 1.2% y-o-y in 3Q13 exactly the same pace as in 2Q13. That has almost matched earlier MED's estimate of 1.3% y-o-y for the quarter. MED estimated that in seasonally adjusted terms GDP declined -0.2% on q-o-q base in 2Q2013. There are...

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Greater Risks and Less Fiscal Policy Leeway
BRAZIL ECONOMICS - Report 11 Nov 2013
Last week the center of attention returned to the timing of the Federal Reserve’s tapering. After the publication of good indicators for the American economy, such as the higher non-farm payroll figures, the rate on 10-year Treasuries climbed nearly 20 basis points (Graph 1). This movement was ac...

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Weekly Tracker: November 10-16
TURKEY - Report 10 Nov 2013
Executive Summary Erdogan’s moral crusade has exhausted all excuses. He is gunning to impose his moral standards on the rest of the nation. The campaign against co-habitation has some real costs and may expose the rifts in AKP. AKP is secure in the polls for the time being, but carrying out sanct...

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Old Problems Resurface
RUSSIA / FSU POLITICS - Report 07 Nov 2013
Migration issues have topped the Russian political agenda after a tragic incident in a Moscow suburb. Legal and illegal foreign and domestic migrants have been engaged in various conflicts with the traditional population throughout the country, sometimes causing street protests and riots. In abse...

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IPCA: Inflation is Becoming More Bothersome Again
BRAZIL ECONOMICS - Report 07 Nov 2013
As expected, the IPCA for October accelerated, reaching 0.57%, after registering 0.35% the month before. Since the monthly rate was very near that of October last year, the accrued 12-month variation changed very little, falling from 5.86% to 5.84%. The acceleration in October was mainly caused b...

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PM Erdogan Moves to Ban Co-habitation
TURKEY - In Brief 06 Nov 2013
We had predicted that the campaign for the March local elections will witness not only moderately higher budgetary spending, but ”social pork barreling”, namely ultra-conservative measures to appease AKP’s constituency. We were dead right. PM Erdogan told reporters that his “conservative democrat...

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Why is the Venezuela Oil Basket Price Falling?
VENEZUELA - Report 05 Nov 2013
The Venezuela oil basket price[1] has been falling and losing ground relative to WTI and Brent since September 2013. For the first time in two years, the Venezuela basket is lower than WTI.As shown on graph 2, Venezuelan oil prices closely follow Mexican heavy oil Maya. This reflects Pdvsa’s pric...

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The 2014 Budget and the Economy
MEXICO - Report 05 Nov 2013
Executive SummaryThe economic figures published in Mexico over the course of October point to an incipient recovery relative to data released in previous months. The most significant of the positive news items include:A slight increase in manufacturing output reported for August (+1.6% yoy);The 1...

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Political Insights: Week of November 4
BRAZIL POLITICS - Report 04 Nov 2013
A busy week in Congress: In the House, the rapporteur of the Mining Code may present his report. On the House floor, the new Civil Process Code may be voted upon. In the Senate, two important Constitutional amendment proposals are on the agenda: the Compulsory Budget and the amendment to institut...

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Politics Clouding the Economic Horizon
BRAZIL ECONOMICS - Forecast 04 Nov 2013
Executive Summary There will be no way for the government to repeat in 2014 the high economic stimulus dose applied in the last presidential election year (2010), which succeeded in boosting GDP growth to 7.5% that year, but also left an inflationary legacy that raised the 12-month IPCA measure a...

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Another Poor Inflation Print
TURKEY - Report 04 Nov 2013
At 1.8%, October CPI-inflation came in markedly higher than consensus (1.3%) as well as our more bearish forecast (1.5%), but thanks to last year’s high base, the 12-month rate nevertheless declined to 7.7%, from 7.9% a month earlier. Yet, both PPI and core inflation (I-index) rose, the latter mu...

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2014 Fiscal Budget
VENEZUELA - Report 04 Nov 2013
The government is budgeting a 3.7 percent of GDP deficit for the national government in 2014, according to the draft budget submitted to the National Assembly on October 15. We forecast a substantially lower deficit at 0.7 percent of GDP. As usual, both revenues and expenditures are underestimate...

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Price Controls and Fiscal Policy
BRAZIL ECONOMICS - Report 04 Nov 2013
The fiscal result for September was disastrous. The consolidated public sector (central plus state and municipal governments) recorded a primary deficit of R$ 9 billion. This lowered the primary surplus in proportion to GDP to 1.6% against 1.8% in August. After correcting the official figures for...