Country Insights

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Devaluation 2015: Act One
VENEZUELA - In Brief 05 Jan 2015 2 responses

After the long suspense caused by President Maduro’s announcements of "a new exchange system", made on December 30, Exchange Agreement 32 circulated on January 5. The delay, added to recent changes in the boards of Pdvsa and Cencoex, suggest that the...

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Inflation: A Happy Ending to a Bad Year
TURKEY - Report 05 Jan 2015

December CPI inflation came in at a negative 0.4%, which was markedly lower than expected (0.1% increase). The 12-month CPI inflation hence fell quite sharply, ending the year at 8.2%, down from 9.2% in November. Domestic-PPI also fell sharply, ending the year at 6.4%, down from 8.4% (T...

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Weekly Tracker: January 4-10
TURKEY - Report 04 Jan 2015

Executive Summary

A parliamentary committee will vote on Monday whether to send some or all of the 4 ex-AKP ministers to the general floor with a recommendation to impeach. We bet that AKP MPs will acquit their colleagues. Meanwhile, we have no idea when the Constitutional Court will...

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Better Than We Hoped
CENTRAL AMERICA - Report 31 Dec 2014

Executive Summary

Preliminary data suggests the economies of Costa Rica, Guatemala and El Salvador performed better than expected this year. The good behavior of the U.S. economy, and trajectory of commodity prices (mainly oil and its derivatives) during H2, helped lift external comme...

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Dilma’s Second Term
BRAZIL POLITICS - Report 31 Dec 2014

Dilma Concludes Ministerial Reform

After extensive negotiation, president Dilma Rousseff (PT) has finished choosing her ministers for her second term.From November 27, when the new economic team was announced, to today (31), a month and four days have passed.The delay in setting up t...

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Promising Prospects
INDONESIA - Report 30 Dec 2014
Executive Summary The short-term volatility in the currency and capital markets notwithstanding, Jokowi’s presidency has created encouraging prospects for Indonesia. The president’s bold November 18th move to cut the oil subsidy has created a large fiscal space that will allow the government t...

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India at the Crossroads
INDIA - Report 30 Dec 2014

Executive Summary

When the Modi administration took charge, there was euphoria and a genuine sense of possibility. The first seven months do not bode well. There are weaknesses in (a) diagnosing the problems (b) establishing strategies of reform and (c) setting up teams that can achie...

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Could Cuba become an economic threat?
DOMINICAN REPUBLIC - In Brief 29 Dec 2014

The simultaneous announcement by the governments of Cuba and the United States to restore diplomatic relations and normalize economic ties received a very warm welcome in all Latin America.


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Budget approved but… to be revised within a month
UKRAINE - In Brief 29 Dec 2014

Last night parliament approved spending plan 2015. In essence we cannot even comment on the document which was approved since none ever seen the one (according to MPs). We assume the document is close to the spending plan initially submitted to the parliament but with some changes MPs dis...

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Corruption, Politics, And Economics: End Of The Year Subjects
PANAMA - Report 26 Dec 2014

Eighteen weeks after assuming office, Juan Carlos Varela faces several key battles in three fronts: scandals of corruption in various cases by officials of the Martinelli administration, the political fragility of the Legislative alliance with the PRD and …alas! …the ec...

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More Free Trade Zones Established
CHINA - Report 24 Dec 2014
Executive Summary Fixed asset investment rose 14.9% y/y in real terms in November, while industrial output fell further, up 7.2% y/y, down almost 2 pps from H1. Time is needed for the Central Bank’s November interest rate cuts to have a positive effect on real economy. Retail sales of consu...

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MPC: An Uneventful Ending
TURKEY - Report 24 Dec 2014

In line with the consensus view, the Monetary Policy Committee left all interest rates unchanged today: the weekly repo rate at 8.25%; O/N lending and borrowing rates at 11.25% and 7.5%, respectively (see chart).

In terms of the content of the statement, there was no major change from...

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Crazy budget 2015
UKRAINE - In Brief 23 Dec 2014 2 responses

It was a huge disappointment to see draft budget 2015 the Cabinet submitted to the parliament today. Given that Ukraine badly needs financial support from the IMF it was widely expected that Minfin will present a realistic revenues’ target with subs...

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Bring Them to the Cities!
CHINA - Report 23 Dec 2014

Executive Summary

Though the Central Economic Work Conference in early December didn’t set a GDP growth target for 2014, many pundits suspect it will be in the 7.2%-7.5% range. Premier Li Keqiang reportedly remarked that 7.2% seemed to be the necessary level for satisfying 2014 Chine...

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The High Opportunity Cost of Arrogance
ECUADOR - Report 23 Dec 2014

Executive Summary

President Correa has accustomed us to his displays of ideology bias and haughtiness. This past week the government denied entrance to a group of representatives from the German environmental parliament. The impasse ended up with Ecuador terminating the environmental...