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Country Insights

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The Current Account Balance Deteriorates Substantially In 2014 Q2
SOUTH AFRICA - Report 09 Sep 2014
Official figures released today by the South African Reserve Bank (SARB) show that the magnitude of the current account deficit worsened in 2014 Q2, recording a shortfall of R222 billion compared to R161 billion in the preceding quarter – see Table 1. Graph 1 Balance of payments on current accoun...

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September Inflation Report
CHILE - Report 08 Sep 2014
On September 4, the Central Bank released its quarterly Inflation Report. The expected growth rate for 2014 was revised lower, roughly by the amount markets expected. The forecast for 2015 was also in line with expectations. Inflation rates for both December 2014 and 2015 were revised higher and ...

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Political Insights: Week of September 8
BRAZIL POLITICS - Report 08 Sep 2014
The repercussions of the revelations made by former Petrobras director Paulo Roberto Costa regarding congressmen, governors and ministers of state who received percentages of company contracts will dominate the political debates.Four presidential polls are expected: Datafolha, MDA, Vox Populi and...

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What is the Trend of the IPCA?
BRAZIL ECONOMICS - Report 08 Sep 2014
In August inflation measured by the IPCA once again was slightly above the target interval, at 6.51%. In previous months, however, the monthly variations of the IPCA had been lower than at the start of the year. This was partly due to favorable seasonal factors and partly due to the decline in fo...

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Davutoglu’s Challenges
TURKEY - Report 07 Sep 2014
Executive SummaryA host of severe policy challenges lie in-wait for Premier Davutoglu. Yet, all of the potential threats to his reign have long gestation periods, meaning that political risk premiums are very likely to range low in the near term. Ankara is afraid of sustaining collateral damage f...

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Potentially Devastating Revelations
BRAZIL POLITICS - Report 07 Sep 2014
Preliminary information resulting from the plea bargain deal, in exchange for cooperation, offered to Paulo Roberto Costa, former Petrobras Director of Supply, is starting to appear and reveal devastating potential. According to Costa, five parties, one governor and 32 parliamentarians were part ...

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Wartime Living
RUSSIA / FSU POLITICS - Report 05 Sep 2014
Russia is increasingly involved in the Ukrainian crisis, both in the international arena and on the ground. Moscow is trying to persuade Kyiv that there is no military solution to the current crisis, which means negotiations with the insurgents in which Russia can be an invaluable mediator but no...

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Rift Threatens to Block Agenda
PERU - Report 05 Sep 2014
Executive SummaryThe souring relationship between Congress and the executive branch is likely to persist. There are already motions to impeach the minister of Energy and Mines (an effort we think will succeed). This will heighten political polarization, which could lead to the ousting of other mi...

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‘Cease-fire’ play
UKRAINE - In Brief 05 Sep 2014
Ukrainian authorities signed cease-fire agreement with separatists. The main question for how long that will last. In our opinion it has poor chances even to start. From the info we see one of the main conditions was withdrawal of Russian military from eastern Ukraine. That could hardly happen be...

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Geopolitical Risk Has Started To Materialize
HUNGARY - Report 04 Sep 2014
Executive Summary As the war in eastern Ukraine was clearly escalating, the forint came under more pressure in recent weeks, its weakening fostered by low domestic interest rates and the central bank’s endeavor to get rid of its non-resident depositors. However, HUF weakness remains measured, as ...

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Brazil Presidential Election
BRAZIL POLITICS - Report 04 Sep 2014
Marina stops growing in Datafolha, and Dilma recovers three points in Ibope The Ibope and Datafolha polls released yesterday presented a very similar scenario.Dilma Rousseff (PT) and Marina Silva (PSB) are technically tied in the 1st round, while Aécio Neves (PSDB) is further and further away fro...

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Firming Up – But For How Long?
MEXICO - Report 03 Sep 2014
Executive Summary Economic news was largely unchanged this month. Areas of weakness, such as internal consumption, tended to fall less, while positive ones, such as industrial activity, recovered faster. The labor market also firmed up, and included the strongest gain in manufacturing employment ...

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Maduro’s Announcements
VENEZUELA - Report 03 Sep 2014
President Maduro’s announcements focus on bureaucratic reorganization, confirming the power of the radical wing of chavismo. The new organization replicates the Cuban hierarchical structure with strong military presence. Both the rhetoric and appointments ratify the political-social model of cont...

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Food Is Not the Only Problem
TURKEY - Report 03 Sep 2014
August CPI inflation came in at 0.1%, slightly above expectations, raising the 12-month rate to 9.5% from 9.3% in July (Table 1; Graph 1). A further increase in food inflation to 14.4% from 12.6% earlier, given last year’s low base, is partly to blame, but it is notable that neither the core infl...

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Costa Rica: President’s Fiscal Approach a Risky Bet
CENTRAL AMERICA - Report 02 Sep 2014
Executive Summary The outlook for Costa Rica for 2014-2015 is clouded by the fiscal situation.The Central Bank projects a government deficit of 6% of GDP in 2014, and 6.6% in 2015.Clearly those are worrisome numbers. Nor is a solution in sight. Plans to increase revenues are based on improving ta...