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UPCOMING WEBINAR - TURKEY: FUNDAMENTAL CHANGE OR BUSINESS AS USUAL?...

​Turkish politics to remain under heavy fog
TURKEY · In Brief · 04 May 2016 · 1 response

I don’t intend to turn this website into a daily blog, but stability in Turkish politics is evaporating very rapidly. I felt it incumbent upon myself to warn my readers that according to some news outlets premier Davutoglu might offer his resignation to president Erdogan tonight. While I find the...

Disinflation Illusion Continues
TURKEY · Report · 03 May 2016

Consumer price inflation surprised once again on the downside in April, coming in at a better than expected 0.8%, m/m, thanks to a very sharp fall in food inflation – the latter constituting the best April on record, since the new series began in 2003. Twelve-month CPI-inflation hence dropped fur...

A hike announcing future hikes
VENEZUELA · Report · 03 May 2016

As we anticipated, on April 30 President Maduro announced a 30 percent minimum wage effective on May 1. This is the first time since 2008 that a hike is enacted on May 1 without announcing further steps. We hold to our view that there will be four wage hikes this year, and Maduro’s statement that...

​Earthquake in AKP
TURKEY · In Brief · 03 May 2016

In our recently published Quarterly Report, I predicted that political risks might begin to be discounted by markets as early as by June or July. One of these risks was the growing rift between president Erdogan and PM Davutoglu. Developments on Friday and over the weekend might possibly expedite...

Week of May 2
BRAZIL POLITICS · Report · 02 May 2016

The Impeachment Committee in the Senate is expected to approve the admissibility of the impeachment of Dilma Rousseff on Friday. The PMDB will release a document detailing proposals for education and healthcare, and against corruption. The PSDB will decide on its participation in an eventual Teme...

The MNB's educational foundations are now officially world-(in)famous
HUNGARY · In Brief · 02 May 2016

Today, the case of the MNB's educational foundations, which have become a key political issue domestically over the last two weeks or so, have made it to the front page of the Economist. The paper describes the case as a stupid political scandal, and indeed it is one of that type, most probably w...

An increasingly fragile financial sector
CHINA FINANCIAL · Report · 02 May 2016

• China’s financial system is becoming increasingly complicated and confused (not to mention confusing), and this is most likely a consequence of a contraction of PBoC reserves (after two decades of expansion) and what we can only assume is a rising amount of unrecognized bad debt, which ties up ...

Q1 2016 preliminary results: 6.1% GDP growth and a decline in unemployment
DOMINICAN REPUBLIC · In Brief · 02 May 2016

The Central Bank announced that economic activity starts up strongly in 2016. Official figures set GDP growth in Q1 2016 at 6.1% compared to q1 2015. Although in January the short term indicator of economic activity reflected a relatively low growth, in February and March activities picked up sig...

The Labor Market Continues to Deteriorate
BRAZIL ECONOMICS · Report · 02 May 2016

The clearest reflection of the severe recession, which is far from over, is the worsening of the labor market. The consequences are a reduction in the level of employment and real wages, accentuating the contraction of household consumption and reducing tax receipts, making the fiscal adjustment ...

Resilient Yet Vulnerable
TURKEY · Forecast · 01 May 2016

After a very rough start into the year, Turkish markets are benefitting greatly from the dramatic improvement in global risk appetite. Thanks to this supportive backdrop and with headline inflation in cyclical decline, largely owing to lower food prices and base effects, the CBRT has started anot...

Economy underperforms expectations in first quarter
ARGENTINA · Report · 29 Apr 2016

In the first quarter, the Argentine economy deviated from our expectations in three areas: inflation, growth, and foreign trade. Even though the market exchange rate is still within the range we had predicted, examining the functioning of the free floating foreign exchange market after the elimi...

Maduro retakes the offensive
VENEZUELA · Report · 29 Apr 2016

President Maduro is back on the offensive in hopes of lasting out its term (till 2019). It seeks to convey that its power is well consolidated and that it will survive any attempt to end its administration before the end of its constitutionally mandated term, and uses the Supreme Tribunal of Just...

Current Government and Private Investment in the South African Economy
SOUTH AFRICA · Report · 29 Apr 2016

​South Africa needs more investment spending than is currently taking place in order for the economy to grow at a rate that is necessary to pull millions of people out of poverty, generate employment opportunities and address the pressing challenge of high income inequality. Of more pressing curr...

IMF in Ecuador's Sight
ECUADOR · In Brief · 28 Apr 2016

The earthquake of last April 16, has forced the government to seek help from the IMF. Minister of Finance Fausto Herrero confirmed he is working with multilateral to set a fast loan agreement to cover part of the losses from the natural disaster. He insisted, however, that the loan must come "wit...

Wages fall behind inflation
VENEZUELA · Report · 28 Apr 2016

​This year we see four minimum wage increases, driven by inflation and politics. Real wages will nevertheless plunge. The first hike this year came in March, when the minimum wage rose by 20 percent and the food bonus rose by 233 percent. We expect the next decree to be approved in coming days...