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UPCOMING WEBINAR - MONETARY POLICY BALANCING ACT: BRAZIL, CHILE, HUNGA...

Room for Improvement
MEXICO · Report · 15 Oct 2013

Executive Summary The Chamber of Deputies is facing an October 20 deadline for passing its version of the 2014 Revenue Law. While no one can predict the final details of that bill, the extent of opposition to new tax proposals suggest that both the administration of President Enrique Peña Nieto a...

Retail Sales in the Restricted and Augmented Senses with Different Behavior
BRAZIL ECONOMICS · Report · 15 Oct 2013

In August, real retail sales in the restricted definition once again came as a positive surprise, with seasonally adjusted growth of 0.9% (+2.1% in July). However, sales in the augmented concept, which includes cars and construction materials, were much weaker. The 12-month rates constructed from...

New Budget, Same Old Problems
DOMINICAN REPUBLIC · Report · 15 Oct 2013

Executive SummaryAggressive tightening in September produced the desired result: interest rates stopped falling, the weakening currency rebounded to early August levels and inflation stopped accelerating. (September inflation was 0.49%; accumulated 2013 inflation through September was 3.57% and y...

Economic Policy Changes: What is the Importance?
BRAZIL ECONOMICS · Report · 14 Oct 2013

Executive Summary The Central Bank indicated there will be one more increase of 50 basis points in the SELIC rate. The 12-month forward-looking inflation expectations stand at 6.2%, and assuming a neutral real interest rate between 4% and 5%, the SELIC rate would have to be raised higher than 10....

Political Insights: Week of October 14
BRAZIL POLITICS · Report · 14 Oct 2013

In the House of Representatives, we highlight the vote on the bill to change the calculation of states’ debt. On Wednesday, Finance Minister Guido Mantega, speaks at the House of Representatives on government taxation. On Thursday, the Central Bank releases the minutes of the most recent Copom me...

Sowing Seeds of Future Discontent
MEXICO · Report · 14 Oct 2013

Executive Summary The demonstrations that held the Mexican capital in their grip for the better part of the past two months have finally died down, but for reasons that could contribute to future strife. The government wielded the proverbial political stick in mid September to drive public school...

Has the Central Bank Increased its Degrees of Freedom?
BRAZIL ECONOMICS · Report · 14 Oct 2013

At the COPOM meeting last week the Central Bank decided to raise the SELIC rate by 50 basis points, to 9.50%. This move had already been widely expected by the market, but the repetition of basically the same communiqué as issued after the previous meetings that were followed by 50-point increase...

In Janet, We Trust
TURKEY · Forecast · 13 Oct 2013

Executive SummaryAfter a difficult and volatile summer, Turkish assets were among the best beneficiaries of the tapering delays and the nomination of Janet Yellen to head the Federal Reserve, but viewing this respite as permanent, would be a mistake, in our view. With almost all the low-hanging f...

Private Sector Likely to Cushion Investment Fall
PANAMA · Forecast · 11 Oct 2013

Executive SummaryThe domestic economy is likely to have less impact on growth from 2013-2015, mainly due to the end of the government’s major investment plan, and the completion of Panama Canal expansion. But execution of major private investments in mining, energy, tourism, logistics and low and...

Exports up by 20.2% in August
PHILIPPINES · In Brief · 10 Oct 2013

August exports posted the highest growth rate so far for 2013 with a recorded uptick of 20.2% year-on-year, which amounted to $4.581 billion. This follows the June and July positive growth numbers of 4% and 2%, respectively. Nevertheless, the year to date growth was still down by 0.83 percent due...

The Cleaning of Downturns
INDIA · In Brief · 09 Oct 2013

There is universal gloom in India today about economic conditions. This perspective is flawed in two ways.First, every market economy experiences business cycle fluctuations. Trend growth is roughly 7%. When we get 10% growth in an expansion, we should not conclude that trend growth has gone up t...

IPCA: End of a Benign Period
BRAZIL ECONOMICS · Report · 09 Oct 2013

In September the IPCA rose 0.35%, greater than the increase of the IPCA-15 for that month (0.27%). With this, inflation over the preceding 12 months accumulated a variation of 5.86% (Graph 1). The IPCA for September should mark the end of a cycle of about four months of relatively benign monthly ...

MTP 2014-16: Cozy But Unlikely
TURKEY · Report · 09 Oct 2013

The authorities’ Medium-Term Program (MTP) for 2014-16 was announced yesterday. The revisions made to the three main macro aggregates and our quick thoughts on them are summarized below. Table 1 below provides the key macro indicators for the current and previous MTPs, while annex tables (1-4) pr...

On Rafael Ramirez's Appointment
VENEZUELA · In Brief · 08 Oct 2013 · 2 responses

Rafael Ramírez replaces Nelson Merentes as Vicepresident for the Economic Area (Decree No. 457, Official Gazette No. 40,266 , 7 October 2013). Merentes will probably soon leave the Ministry of Finance and take an official position abroad. His departure materializes his failure to liberalize the e...

MTP 2014-16: And Then, a Miracle Happens…
TURKEY · In Brief · 08 Oct 2013

The Medium-Term Program for 2014-16 was announced today, somewhat earlier than expected.  The government revised down the growth rate for this year to 3.6% and for the next year to 4%, from previous MTP’s 4% and 5%, respectively.  Inflation is forecasted to end the year at 6.8%, vs. the 5.3% in t...