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COUNTRY INSIGHTS

Bank of Israel holds rates; future easing less likely as Gaza operation gets underway
ISRAEL · In Brief · 20 Aug 2025

As we expected, the Bank of Israel kept the benchmark rate unchanged at 4.5% yesterday, for the 13th consecutive meeting. The tone was cautious and hawkish, with emphasis on inflation risks, geopolitical uncertainty, and a tight labor market. The bank also mentioned signs of a rapid recovery afte...

The Senate approved appointments to regulatory agencies, tensions between the US and South America continue to escalate, and the Senate may vote on the court-ordered debts proposal
BRAZIL POLITICS · Report · 20 Aug 2025

As expected, the Senate approved appointments to the boards of several regulatory agencies. These appointments had been stalled for months. Tensions between the United States and South America have escalated in recent days. U.S. government spokesperson Karoline Leavitt said on Tuesday (August 19)...

Budgetary amendments hint inflation to remain elevated in 2H25
KAZAKHSTAN · In Brief · 20 Aug 2025

As the Kazakh economy grows fast, budget revenues not related to the oil price (and the exchange rate) grew steadily in July, especially on the local level. In 7M25 local budgets accumulated 57.4% of the upwardly amended yearly revenues. The government amended expected local budget revenues by KZ...

Bank of Israel expected to hold rates tomorrow; window for Q4 easing exists
ISRAEL · In Brief · 19 Aug 2025

The Bank of Israel is expected to announce its key policy rate decision tomorrow (Wednesday, August 20). We do not expect a rate cut at this meeting. Why wait: Headline inflation has eased but remains above the 3% upper bound. The BoI continues to warn of labor-supply-driven price pressures, incl...

The new Chevron authorization has no impact on inflation
VENEZUELA · Report · 19 Aug 2025

We revise our inflation forecasts upward from our July report due to the acceleration in the pace of official exchange rate depreciation starting in August, which we interpret as a new exchange rate policy stance by the Central Bank of Venezuela (BCV). Although Chevron was authorized by the U....

Justice Dino issued a decision that blocks the effects of foreign court decisions and laws without their first being validated by a Brazilian court, and the União Progressista party should be created today
BRAZIL POLITICS · Report · 19 Aug 2025

Yesterday, Justice Flávio Dino of the Supreme Federal Court (STF) ruled that foreign court decisions and laws cannot produce effects in Brazil without prior review by the competent Brazilian authority, under penalty of violating national sovereignty. Dino’s ruling sets a precedent that could susp...

The government is interfering with monetary policy once again
HUNGARY · Report · 19 Aug 2025

The often incalculable consequences of current US trade policy have proven to be quite easily calculable lately, even though probably for a short while only. Mr. Trump’s threat to impose penalty-level import tariffs on European goods has been averted, with the initially announced tariffs halved, ...

Political deadlock likely to continue and other weekly topics
BRAZIL POLITICS · Report · 19 Aug 2025

The government may send to Congress the bill regulating big techs. In the Senate, the highlights are the vote on the Precatório Constitutional Amendment Proposal and confirmation hearings for regulatory agency appointees. The parliamentary inquiry into the National Social Security Institute (INSS...

The Legislative Commissions are finally elected: uncertainty ahead. Steps in the right direction in fiscal results through June. Crossroads in ACP investment
PANAMA · Report · 19 Aug 2025

The Budget Commission of the Legislative Assembly was installed on Monday, August 11. It will be chaired by Deputy Eduardo Vásquez of Cambio Democrático (CD). Minister Chapman stated that the MEF will present the budget proposal to the Commission on Wednesday, August 20; Vásquez will open the dis...

Economics: A new strategic plan and a T-bill backed financing mechanism are the latest efforts to rescue an inwardly focused Pemex
MEXICO · Report · 19 Aug 2025

A new financing mechanism for Pemex was announced at the end of July. Although it involves taking on more debt, those liabilities are to be recorded off-balance sheet and could be implemented once again in the near future. It was unveiled not long before Pemex announced its "Strategic Plan 2025-2...

Politics: Unethical practices and luxury lifestyles spark crisis in Morena, calling into question its very identity
MEXICO · Report · 18 Aug 2025

A large part of the appeal of the Fourth Transformation (4T) and Claudia Sheinbaum (and before her, Andrés Manuel Lopez Obrador) has been its repeated message that it alone has taken the moral high ground in a country whose political system is riddled with corruption and assorted ills, with the r...

Not so fast
BRAZIL ECONOMICS · Report · 18 Aug 2025

Despite successive adjustments, the output gap estimated by the Central Bank (BC) has shown little sensitivity to the unemployment rate in recent years. This behavior could be justified by a rapid decline in the NAIRU over the period. However, when estimating it implicitly from the BC’s reference...

Government exploring fiscal reform possibilities
DOMINICAN REPUBLIC · Report · 18 Aug 2025

With Magín Díaz at the helm of the new Ministry of Finance and Economy, discussion is underway about whether the government is preparing to propose a fiscal reform plan. Increasingly clear signals suggest that such a debate may be approaching. Diaz has been meeting with business sector representa...

União Brasil and the Progressista Party to announce a party federation, the appointments to regulatory agencies should be concluded this week, and Congress should vote on the CPMI on the INSS scandal
BRAZIL POLITICS · Report · 18 Aug 2025

On Tuesday, August 19, União Brasil and the Progressista Party will formalize a federation between the two parties, called União Progressista. Together, the two parties will hold 109 seats in the Lower House and 14 in the Senate. The Senate Infrastructure Committee is expected to finally complete...

“Involution” is Beijing’s favorite word
CHINA FINANCIAL · Report · 18 Aug 2025

Special points to highlight in this report: - Chinese policymaking circles have become obsessed with the concept of “involution”, with senior policymakers from Xi Jinping on down demanding that it stop. We should expect that an important focus of policymaking in the next few months will be on...

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