No miracles
RUSSIA / FSU POLITICS · Report · 11 Aug 2017

The Russian leadership was extremely disappointed with the recent turn of the US–Russia relations. Despite a productive presidential meeting, the congressional decision to increase sanctions was clear evidence of no positive change to be expected any time soon. That came as a shock and insult to ...

Politics: BOF Efforts Intensify, But Pitfalls Remain
MEXICO · Report · 11 Aug 2017

As the incumbent PRI considers new ground rules for its presidential selection process, and that of Morena was always a foregone conclusion, PAN and PRD leaders have been stepping up efforts to establish what they have billed as a Broad Opposition Front (BOF) that could involve other political pa...

Corruption and Political Crisis Threaten Economic Recovery
ECUADOR · Report · 11 Aug 2017 · 1 response

The internal crisis in the governing Alianza Pais has ballooned into a government and national political crisis that is threatening President Lenín Moreno’s already-difficult plan to lead Ecuador to economic recovery. The roots of the crisis are twofold. The first is ex-president Rafael Correa...

Real GDP growth declines to 4% in H1
DOMINICAN REPUBLIC · In Brief · 09 Aug 2017

The Central Bank released data that reveals a noticeable contraction in economic activity in H1. The Monthly Indicator of Economic Activity (IMAE, for its Spanish acronym) set real GDP rate of growth at 4%, below its potential. In H1 2016, GDP growth was estimated at 7.4% and for the whole year a...

Buoyant P/E ratio, buoyant earnings growth?
INDIA · Report · 09 Aug 2017

Fine points in the handling of firm data do matter. It appears easy and expedient to use the Nifty market capitalization time series and the Nifty P/E ratio time series to back out an estimate of Nifty earnings time series. While many finance practitioners do this, the procedure is highly mislead...

Inflation nearing 30% in August
VENEZUELA · Report · 09 Aug 2017

Runaway monetary expansion and the steep increase of the price of the dollar in the parallel market continues driving prices upwards. Officially approved price increases in July contributed to inflation while also helping alleviate shortages of some goods. However, the black market for goods thri...

President Zuma Survives the Secret Ballot
SOUTH AFRICA · In Brief · 08 Aug 2017

As I predicted in my yesterday' note, President Zuma survived today's motion of no confidence, held via secret ballots. This outcome,however, is significant in many respects. Firstly, 30 of the ANC MPs sided with the opposition to remove Zuma. This meant the motion received a total of 177 votes. ...

CPI-inflation, core inflation jump on tourism services and food in July
HUNGARY · In Brief · 08 Aug 2017 · 1 response

The July CPI data, released this morning, looks quite bad to be honest. It is not primarily the 0.0% mom, 2.1% yoy (up from June's 1.9% yoy) headline rate that is worrying, as this data was fully in line with analyst expectation (and just slightly higher than our own forecast). It is more the com...

Week of August 7
BRAZIL POLITICS · Report · 07 Aug 2017

The government resumes discussion of Pension Reform – the goal is to begin the vote on the matter in late August. In the Lower House, party leaders are negotiating approval of the provisional measure on payroll tax exemptions. On Wednesday, August 9, IBGE releases inflation data for July. This...

President Zuma faces Secret Ballot at Last
SOUTH AFRICA · In Brief · 07 Aug 2017

Tomorrow, Aug 8th, 2017 is already hard-coded in the annals of SA democratic history for the first ever secret Vote of No Confidence against President Zuma. An hour ago, the Speaker of Parliament announced a historic decision in favour of the 'secret ballot' option- some would say because the Con...

Economics: Reform A Success Minus Pemex
MEXICO · Report · 07 Aug 2017

As we reach the third anniversary of Mexico’s energy reform, the goal of producing the strongest possible results in the shortest time possible remains a key objective, and one on which it is clearly delivering. That success is apparent in the extent to which Mexico has convinced both interna...

Synthesis of the Brazilian Economy
BRAZIL ECONOMICS · Report · 07 Aug 2017

The Chamber of Deputies preferred to ignore the robust evidence and refused to allow the Supreme Court to judge the denunciation of receiving bribes lodged against President Temer by the Chief Prosecutor’s Office. It was a personal victory for Temer, but the fragmentation of the allied base, with...

Politics: Tláhuac Lays Bare Cartel in the Capital
MEXICO · Report · 07 Aug 2017

When Marine troops killed Felipe Pérez Luna ‒ a.k.a. "Los Ojos", the boss of a criminal gang based in the Tláhuac borough and flagrantly operating throughout a considerable part of Mexico City ‒ it brought to the public’s attention just how deeply organized crime has penetrated the capital. It u...

Industrial Production in the First Semester
BRAZIL ECONOMICS · Report · 07 Aug 2017

After a long and intense decline, industrial output grew in the first half of 2017, marking the first episode since 2013 of two straight quarters of expansion. This is a clear sign of the start of overall GDP growth recovery, but the increase in production was not generalized, but rather concentr...

Recent peso depreciation may boost recovery if the Central Bank does not overreact
ARGENTINA · Forecast · 05 Aug 2017

The economy saw two areas of good news in June and July. On one side, several indicators showed that the economy is reviving faster and more broadly than most forecasters expected. On the other side, peso devaluation accelerated, and by the end of July the nominal exchange rate coincided with the...