Putin visits North Korea
RUSSIA / FSU POLITICS · In Brief · 19 Jun 2024

On May 18 Putin arrived in the country for the first time since 2000. For a long time North Korea was unimportant to Russia. It mattered much more to trade with North Korea's regional foes: South Korea and Japan. All that changed in 2022. Russia needs shells and other military hardware. North Kor...

France to give howitzers to Armenia
RUSSIA / FSU POLITICS · In Brief · 19 Jun 2024

On June 18 a deal was made with Armenia. They will be CAESARs which are self-propelled. The agreement was signed in Paris by the respective defense ministers.Armenia's archenemy is Azerbaijan. Baku will not be happy that France is arming Armenia. Because the EU is trying to wean itself off Russia...

European and local elections have changed domestic politics substantially
HUNGARY · Report · 18 Jun 2024

In the European election of June 9, Mr. Orbán’s hopes that the radical right would beat the mainstream bloc were essentially dashed, despite the former indeed making some moderate gains. His immediate response was a sharp turn in external policies, holding back Hungary's blocking votes against NA...

The Challenge of Seasonality
BRAZIL ECONOMICS · Report · 18 Jun 2024

According to the Monthly Retail Trade Survey (PMC), broad retail fell 1% in April, a contraction following 2.5% growth in the first quarter. However, it is noteworthy the discrepancy between this result and the growth of restricted retail (0.9%), vehicles and parts (1.6%), and building materials ...

Congress prepares for 2026 elections; we expect the fiscal deficit to widen, and the CA to remain in surplus; Central Bank will keep cutting, but more policy pauses can’t be ruled out
PERU · Report · 18 Jun 2024

In this report, we begin by discussing politics, focusing on the high number of laws approved by Congress that will shape the 2026 presidential and congressional elections. We then summarize our forecasts on the economy. We start by discussing our base, low and high-case scenarios, followed by re...

The economic team is still waiting for the compensatory measures for payroll tax relief, the Budget committee should present a proposal on spending cuts, and the rapporteur of the BC autonomy bill reads his report
BRAZIL POLITICS · Report · 18 Jun 2024

Finance Minister Fernando Haddad said that the economic team is waiting for compensatory proposals for payroll tax relief so that the Federal Revenue Service can run its calculations. The total cost of the tax exemption is R$ 26 billion. Yesterday, Lula had a meeting with the Budget Committee, wh...

A Hostile World Demands Coherence in Economic Policy Management
BRAZIL ECONOMICS · Report · 17 Jun 2024

The depreciation of the Brazilian real, which began late last year, has gained momentum in recent months. Part of this movement occurred alongside the appreciation of the dollar, but recently domestic factors have been predominant. The currency weakening occurs despite a positive exchange flow, d...

Economics: External and internal risks weigh on historically high FDI over the medium term
MEXICO · Report · 17 Jun 2024

FDI remained high through 1Q24, but new investment flows have slowed to a trickle, and we look for both internal and external factors to seriously limit inflows over an intermediate time horizon. At 20.313 billion dollars, foreign direct investment in Mexico in the aggregate turned in a favorable...

Politics: The extent of the next legislative majority and AMLO’s "Plan C"—two transcendental issues
MEXICO · Report · 17 Jun 2024

In the wake of the June 2 federal elections, the composition of the next Congress and López Obrador’s "Plan C" proposal to reform the Judiciary have emerged as the two main points of political debate. Morena lawmakers have announced that the open parliament discussions on the judiciary that virtu...

The spending-cut agenda and other weekly topics
BRAZIL POLITICS · Report · 17 Jun 2024

The debate between the government and Congress over compensatory measures for payroll tax relief continues. The President of the Senate meets with governors to discuss state debt, and a proposal may be presented to President Lula this week. The Tax Reform Working Group in the House begins discuss...

A thorny path towards the presidency
ECUADOR · Report · 17 Jun 2024

President Noboa still holds close to 50% of popular support. He has stated his intention to run for president in 2025, and his party has been officially qualified by the Electoral Council to do so. His chances of passing into the second round of the presidential elections of next May are high, bu...

CA surplus remains strong, net FDI turns negative
ISRAEL · In Brief · 17 Jun 2024

Macro fundamentals remain shekel-supportive, but slightly less in previous. The current account surplus reached 6.8bn USD in the 1st quarter of 2024, down from 9.3bn in Q423, but higher than one year ago (5.7bn USD, all SA). In Q124, the service account surplus held nearly stable at 10.5bn while ...

Waiting for the Third Plenum
CHINA FINANCIAL · Report · 17 Jun 2024

Special points to highlight in this report: As I mentioned in my May report, the Third Plenum is scheduled to be held in July, much later than the expected October or November date last year. Most analysts believe the long delay suggests the lack of a consensus over how to address weak domesti...

Senate leaders discuss compensatory measures for payroll tax relief, Pacheco discusses state debt with the Federal Government, and the Working Group on Tax Reform will hold seven more hearings
BRAZIL POLITICS · Report · 17 Jun 2024

Senate leaders and government representatives continue discussions on compensatory measures for payroll tax relief for companies and municipalities. The cost of the tax exemption is estimated to be around R$ 26 billion. The president of the Senate, Rodrigo Pacheco (PSD-MG), will meet with governo...

Zelensky in Saudi
RUSSIA / FSU POLITICS · In Brief · 17 Jun 2024

On June 13 he arrived in Jeddah, Saudi Arabia. Zelensky met Mohammed Bin Salman or MBS as he is known. MBS is the Crown Prince of Saudi Arabia and effectively rules this country because his father is incapacitated. The media had not been informed in advance.MBS and Zelensky discussed peace plans ...