Country Insights

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Would Petro be a transformer, or a disrupter?
COLOMBIA - Report 22 Dec 2021 1 response
Loans disbursed in December 2020 deteriorated much faster than those granted before the pandemic. It looks as though the end of 2020 marked the peak in the speed of credit quality deterioration. Loans disbursed in July 2021 seem marginally better, in terms of quality deterioration, than those dis...

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The End of the Spending Cap and the Budget for 2022
BRAZIL ECONOMICS - Report 22 Dec 2021
The approval of the budget for 2022 made obvious what observers already knew. The spending cap rule was shattered, but not only to help the poorest households. The creation of the Auxílio Brasil program to replace Bolsa Família was the Trojan horse of the battle over spending. The moratorium on p...

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Government cabinet decided to halt the rise of interest rates on households' mortgage loans
HUNGARY - In Brief 22 Dec 2021
Today, the government cabinet decided to freeze the interest rates of existing (= not new) variable-rate mortgage loans at the end-October, 2021 level for the whole of H1 2022. This means that banks will not be able to charge more than this level even if the loan contract allowed them to do so.Po...

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Industrial output up by 5.2% y-o-y in 11M21
RUSSIA ECONOMICS - In Brief 22 Dec 2021
Rosstat reported that industrial output increased y-o-y by 5.3% and 5.2% in November and 11M21. As regularly happened in 2020 and 2021, statistics for the preceding month were revised up. This revision was quite significant as, for instance, previously reported y-o-y October growth in manufacturi...

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Yuan may appreciate further in 2022, but not hit 6 to the dollar
CHINA - Report 22 Dec 2021
Growth continues to be weak. In November, industrial output grew 3.8% y/y, down 1.1 pps from Q3, much lower than the growth rates of recent years. Investment is also low, and was up 7.9% y/y, and down 1.2 pps from January-June. Its adjusted growth rate is instead negative. The real estate market ...

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The political winds blow hot and cold for President Lasso
ECUADOR - Report 22 Dec 2021
The Comptroller General exonerated President Lasso from any involvement in the Pandora papers. In this context, the case was archived, and the dark clouds of a possible impeachment blew away. But the relationship with the Assembly is still complicated and even more uncertain than at the beginn...

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Is it game over?
PHILIPPINES - In Brief 22 Dec 2021
Pulse Asia released today the results of its survey of on voters’ presidential preferences conducted in the first week of December. The late dictator’s son, former Senator Ferdinand Marcos, Jr., was the top pick, with a majority (53%) of the respondents saying they will vote for him if elections ...

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​The indexation scheme: some tentative scenarios
TURKEY - In Brief 21 Dec 2021 3 responses
The Ministry of Treasury and Finance released a one-pager today (link here; in Turkish) providing a bit more detail on the planned F/X-indexation scheme. As we wrote yesterday, and it is now widely available in open media sources, the scheme aims to protect TL deposits against exchange rate-drive...

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Consumer credit growth decelerated sharply amid a strong increase of household deposits in November – well before the recent key rate hike
RUSSIA ECONOMICS - In Brief 21 Dec 2021
Central Bank of Russia reported that the total credit to households grew by a mere 0.9% m-o-m in November, having decelerated sharply from 1.6% m-o-m in October and average monthly 2.0% seen in 2Q21 and 3Q21. At the same time, household deposits in November increased by 1.7% m-o-m, having fallen ...

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Monetary policy considerations
PHILIPPINES - In Brief 21 Dec 2021
Although central banks around the world pursued similar strategies of pouring monies into their economies in the wake of the pandemic, it is clear from their divergent moves this year that there is no one-size-fits-all exit strategy. With the most-watched central bank, the US Fed, signaling readi...

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Can Russia solve the European gas crisis?
RUSSIA ENERGY / FINANCE - Report 20 Dec 2021
The current European energy crisis and huge market volatility are early indicators of imbalances in an accelerated energy transition scenario. The strategy of massive closure of nuclear and coal generation in Europe has led to an increase in the fragility of the entire energy system. The critica...

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Politics: Opposition mired in internal crises and low approval, despite poor AMLO results
MEXICO - Report 20 Dec 2021
Mexico is experiencing several economic and political negative effects as a result of President Andrés Manuel López Obrador’s failed policies. Yet the two main opposition parties, the Institutional Revolutionary Party (PRI) and the National Action Party (PAN) are bogged down in multifaceted crise...

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Economics: Looking ahead to 2022 and beyond
MEXICO - Report 20 Dec 2021
In the last issue for 2021, in place of our usual monthly review we are providing an overview of the most significant features of the economic outlook for 2022 as it currently stands Despite the extent to which the Mexican economy rebounded in late 2020 and the first half of the current year, we...

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Russian Ambassador attends inauguration in Transdnistria, irking Moldova
RUSSIA / FSU POLITICS - In Brief 20 Dec 2021
On December 19 the Moldovan government expressed its protest at the decision. Transdnistira effectively seceded from Moldova in 1991, and the Russian Army is there. Moscow says its troops are peacekeepers. Transdnistria is a Russian-speaking region of Moldova. The rest of Moldova is mostly Romani...

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Russian Macro: The Central Bank Turning Increasingly Hawkish
RUSSIA ECONOMICS - Report 20 Dec 2021
On December 17, the Central Bank of Russia raised its key rate by 100 bps to 8.5% and mentioned that a further rate hike could be possible in mid-February if inflation expectations remain high and inflation itself stays elevated. The regulator one more time referred to its previous views suggesti...