GDP in the Third Quarter
BRAZIL ECONOMICS · Report · 03 Dec 2015

Third-quarter GDP contracted 1.7% in relation to the previous quarter. The estimate for the year is a drop between 3.7% and 4%, and based on an estimate that GDP will fall by 1% in the fourth quarter, the carry-over to 2016 is -2%. The recession has lasted six quarters and the drop in GDP drop...

November Inflation and the New Normal
TURKEY · Report · 03 Dec 2015

Consumer prices rose by a higher than expected 0.7% in November, which meant an increase in the 12-month rate to 8.1%, from 7.6% in October. Producer prices behaved better, declining to 5.25%, y/y, from 5.7% a month earlier, possibly reflecting the favorable cost-push effects from a stronger lira...

The disqualification of Senator Poe
PHILIPPINES · In Brief · 03 Dec 2015

"Increased uncertainty" is becoming a common refrain among political analysts these days. We are hearing it again following a disqualification decision Tuesday against Senator Grace Poe by a 3-member division of the Commission on Elections (Comelec). The ruling is on one of four disqualification ...

Bank risks can create system risks
CHINA FINANCIAL · In Brief · 02 Dec 2015 · 1 response

Why does an open capital account reduce Beijing’s ability to control refinancing risk? Because part of reason that what looks like liquidity mismatches between shorter-term liabilities and longer-term assets are a lot less risky than they seem for China is that liabilities may be liquid at the in...

Should China relax capital controls?
CHINA FINANCIAL · In Brief · 02 Dec 2015

But here’s another thought. SDR membership may actually hamper Beijing's ability to constrain capital flows because now that they have taken the seat they’ve always wanted, at the big boy’s table, they can’t really go back to tossing pieces of bread at the other kids. Beijing is going to have to ...

Does SDR membership weaken the RMB?
CHINA FINANCIAL · In Brief · 02 Dec 2015

There is a lot of excitement about the RMB’s having become part of the SDR basket, and so I hate to say that we risk making much ado about what, at best, is unlikely to be a very big deal, at least in the short term. Foreign investor appetite for Chinese government bonds, or indeed most other Chi...

Guatemala: Presidential Mystery
CENTRAL AMERICA · Report · 02 Dec 2015

After a political campaign without formal discussions of his plans for governing, President-elect Jimmy Morales has not yet clearly communicated his priorities.Morales' task won’t be easy. He was invited to lead his party as a candidate, but was neither a party leader nor a politician – and so he...

Fiscal Results, Pension System and Politics
PANAMA · Report · 01 Dec 2015

The fiscal results to September 2015 released by the Ministry of Economy and Finance showed an overall deficit of the NFPS of $903 million (-2.3% of GDP[1]), smaller than last year’s (-5.8% of estimated GDP1). Although this figure represents sound public finance management, the main reason the de...

Turning Point?
INDONESIA · Report · 01 Dec 2015

New national accounts data brings encouraging news: though below consensus expectations, growth in Q3 was higher than in Q2. This is at least anecdotal evidence of a possible turnaround, especially if the trend persists. Growth was reported at 4.73% in Q3, up from 4.67% in Q2, though still dow...

The Fiscal Disaster and Monetary Policy
BRAZIL ECONOMICS · Report · 30 Nov 2015

There is little hope of any improvement in the fiscal picture: the most recent numbers reveal that over the past 12 months, the central government has accumulated a recurring deficit of more than 1% of GDP; the recession continues to erode revenues; and there is no political support for approval ...

Coexistence or new government?
VENEZUELA · Report · 30 Nov 2015

With December 6 (“6D”) National Assembly elections a week away, surveys continue to show the opposition leading by 10 to 30 percentage points. However, with a still-large share of undecided voters, an unequal distribution of seats that gives the government a built-in advantage, and the government...

Week of November 30
BRAZIL POLITICS · Report · 30 Nov 2015

This will be one of the tensest weeks of President Dilma Rousseff’s second term. The president of the House has promised to examine the impeachment requests by Friday, December 4. The vote on changes to the 2015 fiscal target is scheduled for Tuesday.

The South African Economy Avoids a Recession but Continues to Struggle
SOUTH AFRICA · Forecast · 30 Nov 2015

South Africa’s Growth: The South African economy has entered a difficult period once again; the most recent major one was the 2008-09 global financial crisis. Risks to the outlook remain on the downside, with a myriad of unfavorable conditions facing the economy. The country, however, narrowl...

Change in the Monetary Policy Signal
BRAZIL ECONOMICS · Report · 30 Nov 2015

Although keeping the SELIC rate at 14.25% a year, the Central Bank signaled that it might return to a tightening cycle. At the last COPOM meeting, two directors voted for a hike of 0.5 percentage point, and the communiqué omitted the previous comment that the interest rate would be maintained “fo...

Bad news, good news
TURKEY · In Brief · 30 Nov 2015

So many events are developing so fast that I couldn’t cover them all in the Weekly Tracker. In this update I’ll report on the murder of the Diyarbakir Bar Association Chairman Mr. Tahir Elci (bad news) and the summit agreement between Turkey and EU (very good news) regarding refugees and the open...