NEWS FLASH

WEBINAR - LATIN AMERICA: FISCAL PRESSURES AND POLITICAL SHIFTS...

Silent concessions
VENEZUELA · Report · 28 May 2025

The exchange of concessions between the U.S. and Venezuelan governments signals a pragmatic understanding that prioritizes immediate mutual interests. Maduro seeks to consolidate his grip on power, while Trump (via Grenell) aims to secure gains on deportations and limit Chinese influence over Ven...

Congressional pressure to overturn Lula’s IOF decree continues to mount, the STF will hear a case on the CIDE tax on money transfers abroad, and the Senate may vote on a bill that increases federal salaries
BRAZIL POLITICS · Report · 28 May 2025

In Congress, pressure continues to mount to overturn President Lula’s decree raising the IOF tax. The agribusiness caucus is working in coordination with other parliamentary fronts to approve a legislative decree nullifying the tax hike. Pressure on public finances is also coming from the Judicia...

Slowdown and remittance fears
CENTRAL AMERICA · Report · 27 May 2025

Costa Rica’s economy is entering a clear slowdown phase, after two years of strong post-pandemic momentum. GDP growth decelerated to 3.9% y/y in Q1 2025, driven by a sharp weakening in the domestic (definitive) regime, which accounts for the bulk of national output. While free trade zone activity...

Sanctions on Venezuela become tighter and more opaque
VENEZUELA · Report · 27 May 2025

There will be no General License 41c. We infer that Chevron is now operating under private licenses, out of public view. The US Treasury's Office of Foreign Assets Control (OFAC) did not issue a general license clarifying the conditions for Chevron's continued presence in the country after the ex...

Will China's economy and technology surpass the U.S.?
CHINA ADVISORY · Report · 27 May 2025

There is a growing view that China’s economy and technology will soon surpass that of the U.S. Kyle Chan, a researcher at Princeton University, outlined this argument in a New York Times op-ed: “For years, theorists have posited the onset of a 'Chinese century': a world in which China finally ...

No policy change at today's Monetary Council, as expected
HUNGARY · In Brief · 27 May 2025

The base rate remains at 6.5%, and the interest rate corridor has also been left at 5.5-7.5%. The Council expect headline CPI-inflation close to (meaning not a lot above) the target range. They continue to aim at maintaining the stability of financial markets (in our reading this primarily means ...

Kazakhstan macro: economy doing well—but unclear how well
KAZAKHSTAN · Report · 27 May 2025

The Bureau of National Statistics reported that economic growth looked strong in 1Q25 and 4M25: in the former case, GDP grew by 5.6% y-o-y, and in the latter case, the short-term indicator was up y-o-y by 8.5% in 4M25 and 8.9% in April alone. The short-term indicator grew faster than GDP because ...

Summer offensive looms, on the heels of performative diplomacy
UKRAINE · Report · 27 May 2025

U.S. President Donald Trump continues to consistently fail in delivering on his promise to end Russian aggression. His threats to increase pressure on the Kremlin are clearly not being taken seriously. Each time Trump makes a statement, Russia responds with defiance or escalated brutality—yet Tru...

What goes around, comes around (with interest)
BRAZIL ECONOMICS · Report · 27 May 2025

The Bimonthly Revenue and Expenditure Report indicates that the National Treasury’s financing need in 2025 will reach BRL 76 billion, BRL 47 billion above the amount originally projected in the Annual Budget Law (LOA). Despite official rhetoric, it is clear that the government’s goal is merel...

The cost of President Lula's popularity and other weekly topics
BRAZIL POLITICS · Report · 27 May 2025

The Environmental Licensing bill reaches the Lower House. The House may also vote on proposals related to avian flu. The government will issue a decree detailing budget cuts. The Supreme Federal Court (STF) begins, via virtual plenary, deliberations on a case concerning non-affiliated (independen...

A tale of two realms: economic silence and political noise
CHILE · Report · 27 May 2025

The Chilean economy has grown rather uneventful. Macroeconomic data points to a balanced economy with limited growth potential. National accounts for Q1 2025 confirm that growth is mostly export-led, while investment remains weak. Gross fixed capital formation growth y/y was positive in Q1, but t...

Politics: Ties between organized crime and political figures pose a major challenge to Mexico’s stability and future
MEXICO · Report · 27 May 2025

A key point of contention between the U.S. and Mexican governments has been the link between organized crime and key public officials and politicians. While tariff disputes have their ups and downs, this claim has been a constant for Washington, but has resulted in an unambiguous denial on the pa...

The IOF decree continues to cause friction within the government, the Lower House should discuss the Propag program for Minas Gerais, and Bolsonaro’s allies continue to clash with the Supreme Federal Court (STF)
BRAZIL POLITICS · Report · 27 May 2025

The government’s decision to raise the IOF tax continues to generate friction and reactions from all sides. Hugo Motta indicated that he will bring to discussion, in the Lower House leadership meeting, a legislative decree proposal to suspend President Lula’s decree that increases the IOF. This a...

Economics: First quarter GDP and March IGAE anticipate further weakening for the remainder of the year
MEXICO · Report · 27 May 2025

Last week saw the release of revised GDP data for the first quarter of 2025, which showed a 0.6% seasonally adjusted annual rate of growth. The week also saw the IGAE for March, which reported a -0.1% annual decline. In most branches of activity, the economic indicators for March and those availa...

BoI keeps rate at 4.5%; hawkish tone, but easing later this year still possible
ISRAEL · In Brief · 27 May 2025

Policy decision in line with expectationsThe central bank of Israel kept its benchmark interest rate unchanged at 4.5% on May 26th, for the eleventh consecutive meeting. This decision was in line with market expectations. Forward guidance unchangedThe Bank of Israel preserved the exact same forwa...