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Country Insights

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President Medina stirs the hornet's net on re-election
DOMINICAN REPUBLIC - In Brief 21 Aug 2014 1 response
In answering questions from the media, President Danilo Medina stirred the hornet’s nest. Instead of closing the debate with a clear “no” to the possibility of amending the Constitution to allow him to run again, Medina said that he’ll provide an answer “when the time comes”. This answer contrast...

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At last, the Verdict is Final and Binding
INDONESIA - In Brief 21 Aug 2014
The Indonesian General Election this year seemed to be like a roller coaster. At one time it was already at the peak of the process when the General Election Commission announced on July 22, 2014, that Joko (Jokowi) Widodo and Jusuf Kalla were the President and Vice President Elect of 2014 – 2019...

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Damage Control
ARGENTINA - Report 21 Aug 2014
This Market Brief was originally issued on August 20, 2014 as a post on GSP Direct, the GlobalSource Partners interactive webtool providing clients an initial response to breaking news and developments. In line with what might have been expected[1], the confirmation of Argentina’s legally induced...

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What’s Maduro’s Plan?
VENEZUELA - Report 21 Aug 2014
Executive Summary To say that there’s a “Nicolas Maduro Plan” for the economy is an overstatement. Moreover, insofar as one does exist, we think little of it will be implemented beyond gasoline price hikes. It’s hard to describe the “Maduro Plan” because the government is trying to avoid the impr...

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Damage Control
ARGENTINA - In Brief 21 Aug 2014
In line with what might have been expected[1], the confirmation of Argentina’s legally induced default of its exchanged bonds issued under foreign law convinced the government to move ahead with “damage control” measures ahead of a complex debt negotiation scenario next year. Although the governm...

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Brazil Presidential Election
BRAZIL POLITICS - Report 20 Aug 2014
Beto will help with Marina’s relationships with the PSB and agribusiness The choice of federal representative Beto Albuquerque (PSB-RS) as Marina Silva’s running mate is important for two reasons.First, he can contribute by bringing Marina closer to the party, whose leadership has reservations ab...

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Robust Growth, without Fiscal Surprises
DOMINICAN REPUBLIC - Report 19 Aug 2014
Executive Summary GDP growth rose an impressive 5.2% in H1, according to new Central Bank data, the largest expansion for a single semester since 2010. Accumulated inflation reached 1.93%, while y/y inflation was 3.41%, well below the lower limit of the Central Bank’s 2014 target range (4.5% ± 1%...

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Oversight and the Price of Congress
MEXICO - Report 19 Aug 2014
Executive Summary Much has been written about the high cost of Mexican democracy, including the funds needed to sustain the Mexican Congress. Part of the problem stems from the fact that the legislative branch acts as both judge and jury when allocating public funds. There has been a considerable...

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Domestic Savings at Midyear
MEXICO - Report 19 Aug 2014
Executive Summary Domestic financial savings in Mexico began to recover in the second quarter of 2014 as the public deposited funds with their banks at a greater rate than in either 2013 or the first quarter of 2014. That increase in deposits was achieved despite the fact that real term interest ...

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Industry: Slumps 12.1% in July
UKRAINE - In Brief 19 Aug 2014
In July industrial output fell 12.1% y/y twice as fast than a month ago (-5.0% y/y in June). Stronger contraction of metals’ output (-12.3% y/y vs. 5.6% y/y at the prior month), mining (-12.1% y/y vs. -4.8% y/y in June) and utilities (-7.8% y/y vs. -1.5% y/y) were the main reasons for sliding rat...

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Bad news about the government debt ratio
HUNGARY - In Brief 18 Aug 2014
Fact: The government debt ratio, as calculated by the MNB according to Eurostat standards, rose to 85.1% of GDP by June 2014 from 79.4% in December 2013, to a level that is nearly as high as a peak 85.6% in the middle of 2010. Significance: The government has always claimed that reducing the gove...

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On The Verge of Recession
BRAZIL ECONOMICS - Report 18 Aug 2014
In June, the IBC-Br, which is a proxy for monthly GDP calculated by the Central Bank, fell 1.5%. With this, the decline in the second quarter was 1.2%, and this is a good estimate of what the GDP figures will show for the quarter (Graph 1). Worse than the magnitude of the drop are its characteris...

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Political Insights: Week of August 18
BRAZIL POLITICS - Report 18 Aug 2014
The elections enter a new phase with important events scheduled for this week.Free electoral ads on radio and TV begin on Tuesday, August 19. The following day, the PSB will confirm Marina Silva as Eduardo Campos’ replacement in the presidential race.President Dilma Rousseff and PSC candidate Pas...

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An Urgent Search for Funds
ECUADOR - Forecast 18 Aug 2014
Executive SummaryThe gauge in the Treasury’s coffers veered toward empty, with just $348 million in cash on average between January and May, down from $1.25 billion during the same period last year. Unsurprisingly, the government is aggressively campaigning to control liquidity. The new Monetary ...

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Crunch time in Turkish politics
TURKEY - In Brief 17 Aug 2014
While Erdogan easily rode to the presidency on the back of a 51.8% majority, the task of transition and succession in the party is turning out to be more arduous. In this Brief, I’m updating my predictions for the new AKP chairman and key cabinet posts, while the Cosmic Dude barges in with his il...