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2014: A Year of Many Challenges
BRAZIL ECONOMICS · Report · 13 Jan 2014

Executive Summary The first problem faced by the government at the start of 2014 is the weak economic growth. The deceleration in payroll levels and slow expansion of consumer credit are limiting growth of household consumption, and the uncertainties about the domestic economy are discouraging...

Weekly Tracker: January 12-18
TURKEY · Report · 12 Jan 2014

Executive Summary As the High Commission of Judges and Prosecutors, Turkey’s top judicial body, openly rebelled against AKP, the country entered a full-blown constitutional crisis. Erdogan threatened retaliation against the business community and Gulen Movement when he returned home from the East...

Weekly Tracker: January 12-18
TURKEY · Report · 12 Jan 2014

Executive Summary As the High Commission of Judges and Prosecutors, Turkey’s top judicial body, openly rebelled against AKP, the country entered a full-blown constitutional crisis. Erdogan threatened retaliation against the business community and Gulen Movement when he returned home from the East...

All’s Well that Ends Well
COLOMBIA · Report · 10 Jan 2014

Executive Summary Q3 y/y GDP growth at 5.1% outstripped expectations, of 4.4% on average. As the strongest growth rate in more than six quarters, it has significant implications for monetary policy and the presidential elections, after a Q2 downward revision (to 3.9% from 4.2%) that stoked fears ...

Fundamental Change in Financial Regulation
INDIA · In Brief · 10 Jan 2014

The Indian Financial Code: A bridge too far? Transformative change of the Indian State takes place through big projects. We seem to combine stasis in government, with ground-up rethinking in big projects. Six big projects are now in the fray: Goods and Services Tax (GST) Direct Tax Code (DTC) Ind...

Industrial Production Remains Stagnant
BRAZIL ECONOMICS · Report · 09 Jan 2014

Industrial output fell 0.2% in November (seasonally adjusted), bringing the 12-month variation to just 0.4% (Graph 1). Although these rates exceeded the consensus projections, the result is by no means rosy, with the monthly rates continuing their recent pattern of high volatility without any cle...

Introductory Report: Short-term Stability with Serious Sustainability Concerns
HUNGARY · Report · 09 Jan 2014

Executive Summary With a recovery underway, fiscal stabilisation implemented, record low inflation, and a sizeable current and capital account surplus, Hungary shows signs of strengthening macro fundamentals. Sovereign credit and bonds improved substantially, despite the sizable external and gove...

All The President’s Power
RUSSIA / FSU POLITICS · Report · 07 Jan 2014

Two more terror attacks taking place in Russia’s large southern city of Volgograd (following an attack in October) challenge both the security arrangements of the coming February 2014 Sochi Winter Olympics and Putin’s anti-terrorism strategy in general. Lack of coordination between various law en...

The Trade Balance in 2013
BRAZIL ECONOMICS · Report · 06 Jan 2014

Brazil’s trade balance fell from US$ 19.4 billion in 2012 to only US$ 2.5 billion in 2013, with imports growing 7.4% and exports shrinking by 0.2%, influenced by the end of the cycle of rising commodity prices (Graph 1). This is the lowest trade balance since 2001. The decline in the trade balanc...

Weekly Tracker: January 5-11
TURKEY · Report · 05 Jan 2014

Executive Summary AKP and the Gulen Movement traded heavy blows during the week, with no prospects of peace in the offing. Unfortunately, Turkey seems on the road to nowhere, with the captains bickering about the course and staff. Turkey’s institutions are showing signs of lasting damage, too, wh...

Happy New Year?
PANAMA · Report · 04 Jan 2014

Three surprises (one because of its size, a second one internally provoked and the third, exogenously determined) were the relevant economic events of the final days of 2013 and the first day of 2014. Let us review them. The big jump in minimum wages for 2014-2015 Every two years, the Government ...

Ooops, Missed It Again…
TURKEY · Forecast · 03 Jan 2014

Consumer prices rose by a slightly higher than expected 0.5% in December, with the 12-month rate hence ending the year at 7.4%, above the CBRT’s latest estimate of 6.8% as well as the medium-term target (or the Holy Grail) of 5%. Compared to the same month of previous year, the behavior of food a...

Economy, “Burnt by the Sun”?
TURKEY · Report · 30 Dec 2013

Executive Summary The vulnerable mix of a high external financing requirement and a daring monetary policy experimentation has coincided with a political shock of historic proportions, leading to mayhem in Turkish markets in the last two weeks of the year. We take stock of the damage so far, and ...

Turkey’s Corruption Crisis: Is There a Way Out?
TURKEY · Report · 29 Dec 2013

Executive SummaryThe war between the erstwhile Islamist allies, AKP and the Sunni Gulen Movement, has escalated every day since it erupted onto the national scene some two weeks ago. The crisis has sprung up constitutional, diplomatic and economic angles that compel us to call the controversy the...

A Civil Cold War, Set to Escalate
UKRAINE · Forecast · 29 Dec 2013

EXECUTIVE SUMMARY “Civil cold war” is a phrase that describes the domestic situation well.The authorities keep living in a reality of their own making, assuming people will accept it, and that the protests will wane. Yet many Ukrainians don’t foresee a continuation of the status quo: that is, the...