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COUNTRY INSIGHTS

Revisions are due everywhere, from GDP to fiscal and monetary policy
HUNGARY · Forecast · 18 Jul 2019

Compared to our previous medium-term forecast, released in April, there are no fewer than five areas where material revisions seem to be justified. First, we are raising our forecast for this year’s GDP, despite maintaining the view that growth should indeed decelerate in H2 and next year. Second...

South Africa’s interest rate cut finally arrives
SOUTH AFRICA · Report · 18 Jul 2019

On Thursday (18 July 2019), the nation waited with bated breath on the announcement of the interest rate decision by the Governor of the Reserve Bank (SARB), Mr Lesetja Khanyago. There was a general expectation for the central bank to cut interest rates by 25 basis points after keeping them uncha...

Russia considering constitutional amendments
RUSSIA / FSU POLITICS · In Brief · 18 Jul 2019

Vyacheslav Volodin, the Speaker of the Russian Parliament, has proposed amending the constitution to transfer some president prerogatives to the Parliament. Volodin's idea has not yet taken the form of draft legislation. Volodin said that his proposal will enable the state to enact social justice...

One more rate cut: down to 17.0%
UKRAINE · In Brief · 18 Jul 2019

As expected, the NBU Board approved one more policy rate cut by 0.5 ppt down to 17.0%. The hryvnia's strengthening as well as inflation's easing are behind the decision. The political cycle also appeared to be much smoother than any predicted. The next meeting of the NBU Board will be on Septembe...

Lucky Zelenskiy inherits a boom
UKRAINE · Forecast · 17 Jul 2019

Not only was new President Volodymyr Zelenskiy lucky to enjoy the support of 73% of voters, but he’s also fortunate to have inherited from his predecessor a freshly recharged economy. Ukraine’s GDP is on a sustainable growth path. Private consumption grew 10.7% y/y in Q1, and promises to rise ...

US Congress shifts against Saudi and UAE, hinting at problems post-Trump
GULF COUNTRIES · In Brief · 17 Jul 2019 · 1 response

Later today, the US House of Representatives will pass resolutions blocking emergency arms sales to Saudi Arabia and UAE, which the Administration had fast-tracked as part of its show of force against Iran. President Trump will veto the resolutions, but they are still indicative of hardening opin...

Rail renovation behind schedule
RUSSIA / FSU POLITICS · In Brief · 17 Jul 2019

On July 16 the vice minister of Russian Railroads Maksim Akimov told a private meeting that stage one of upgrading the Trans-Siberian Railroad will not be completed on time. It was supposed to be finished by 2020. Construction is particularly problematic around Lake Baikal and the Amur River. Aki...

SAUDI: Government spending supports non-oil economy and requires further debt issuance
GULF COUNTRIES · Report · 16 Jul 2019

The sharp slowdown in GDP growth in Q1 was due to voluntary oil production cuts and is not an immediate cause for concern. More positively, government spending in 2018 fed through into higher private non-oil sector growth in Q1 2019. Leading economic data indicates continued momentum in the non-o...

Russia is de-centralizing national projects
RUSSIA / FSU POLITICS · In Brief · 16 Jul 2019

On July 15 Prime Minister Dmitry Medvedev announced that he wished to transfer decision making on the 12 national projects to independent committees. Until now decision about the national projects had been made by the Presidium of the Council on Strategic Development and National Projects. This o...

Primer on Pemex Business Plan: general overview is not promising
MEXICO · In Brief · 16 Jul 2019

This morning the head of Pemex (Octavio Romero), made some general remarks about Pemex Business Plan, that was yesterday unanimously approved by Pemex Board (in absence, but with representation of new Finance Minister A. Herrera). We’ll analyze the full document as soon as it is available, howeve...

Former President Jacob Zuma finally honors the State Capture Commission’s request to face the nation
SOUTH AFRICA · Report · 16 Jul 2019

​In the State of Capture 2016 report by the ex-Public Protector, Thuli Madonzela, the former President, Jacob Zuma, was found to have been the key role player in state capture. The report was “an investigation into complaints of alleged improper and unethical conduct by the president and other st...

Rosneft asks for huge tax break for Arctic exploration
RUSSIA / FSU POLITICS · In Brief · 16 Jul 2019

Igor Sechin (CEO of Rosneft) wrote to President Putin requesting an enormous tax break to enable his company to develop oil production in the Arctic Circle. Rosneft estimates it will spend anywhere between USD 80 billion and 135 billion. The tax exemption requested is worth about USD 41 billion. ...

Pension Reform: The worst has passed and other weekly topics
BRAZIL POLITICS · Report · 15 Jul 2019

Congress enters its midyear recess on Thursday, July 18. The government may present details of the Tax Reform proposal it will sent to Congress. The economic team may announce economic stimulus measures. President Bolsonaro takes part in the Mercosur Summit in Argentina. Brazil takes over preside...

Economics: Reality disconnect as the economy stalls
MEXICO · Report · 15 Jul 2019

Almost all major economic growth drivers have stalled or are in retreat, particularly investment, and to a lesser extent both public and private consumption, while economic expectations continue to slip lower. So far the government’s efforts to reassure all stakeholders have proven, at best, poor...

Politics: A new balance of forces under AMLO
MEXICO · Report · 15 Jul 2019 · 1 response

Carlos Urzúa’s abrupt resignation last week as minister of finance cast a new light on the sorts of rivalries plaguing the administration of President Andrés Manuel López Obrador, as well as the pitfalls of trying to manage such an ideologically diverse array of appointees. There is nothing p...

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