GlobalSource Partners | Country Insights

The NBU Board decided to leave prime rate unchanged at 7.5% despite dramatic inflation speed up (in May CPI went up by 9.5% y/y and PPI surged to +33.1% y/y). The decision went in line with our reading of the NBU policy though we see this decision as a mistake. Press-release of the NBU tells abou...

Israel’s new government may be an easier Gulf partner, despite offering little "change" to Palestinians

GULF COUNTRIES · Report · 17 Jun 2021

The new coalition government formed on Sunday has a wafer-thin majority and could easily break apart. While it lasts, there is unlikely to be a material change in policy towards Palestinians, unless it is overtaken by events. However, its tone on regional issues, including Iran, is likely to be ...

Russian economy back at pre-pandemic size

RUSSIA / FSU POLITICS · In Brief · 17 Jun 2021

On June 15 the Central Bank of Russia announced that Russia has recovered. The economy contracted 3% in 2020. In some sectors the economy has exceeded its prepandemic level.Russia is the first major economy to complete its recovery. This is partly due to having a relatively small service sector. ...

Wilson Witzel testifies in the COVID CPI, Special Committee on Administrative Reform meets to set work schedule and government discusses water crisis provisional measure

BRAZIL POLITICS · Report · 16 Jun 2021

The rapporteur of the provisional measure on the privatization of Eletrobras should submit his report today. The measure is expected to be approved before it expires. Center parties meet to discuss supporting a center candidate in the upcoming presidential election in 2022.

Moscow returns to restrictions as coronavirus spread rapidly

RUSSIA / FSU POLITICS · In Brief · 16 Jun 2021

On June 14 Moscow began a non-working week. More accurately, that is to work from home. Emergency services are still operating normally. The new rules apply to places of entertainment and stores which are closed. Playgrounds are closed. Restaurants do takeaway only after 11 pm. This is not as str...

Russia’s 1Q21 GDP looks better than was reported earlier

RUSSIA ECONOMICS · In Brief · 15 Jun 2021

Rosstat reported that the 1Q21 GDP was down by 0.7% y-o-y, which is better than the initially reported 1.0% contraction. Mining was down by 7.4%, manufacturing was up by 0.6%. Trade (wholesale and retail) combine with auto repairs was up by 0.7%. The financial sector kept growing fast and was up ...

Inflation in May comes in slightly below expectations

ISRAEL · In Brief · 15 Jun 2021

The CPI in May increased by 0.4% m/m and by 1.5% y/y (following 0.8% in April), slightly below market expectations of 0.5% m/m (and ours). Core inflation (the CPI exc. energy and fresh produce) accelerated to 1.0% y/y from 0.45% last month. The downward surprise in May came from clothing prices w...

A busy week in Congress, several bills and provisional measures should be put to a vote today, and Marcellus Campêlo should testify in the COVID CPI

BRAZIL POLITICS · Report · 15 Jun 2021

The government is planning on replacing the Bolsa Família and emergency aid programs with a new basic income program that should help President Bolsonaro’s re-election campaign. The rapporteur for the provisional measure on the privatization of Eletrobras should submit his report on the text toda...

Some unnecessary excitement about MNB policy yesterday

HUNGARY · In Brief · 15 Jun 2021

Perhaps the MNB should consider to stop talking publicly for at least a week ahead of critical Monetary Council meetings, when public attention is focused heavily on each and every word they say. That could lessen the risk of potential damage if the market is unable to read various statements com...

Former Soviet countries struggle to go green

RUSSIA / FSU POLITICS · In Brief · 15 Jun 2021

On June 9 the CEO of Rosneft said that the world needs ''green'' oil from Russia. The semi-state giant opened the Vostok Oil facility in 2021. This will be the Arctic's main oil terminal producing 30 million tons by 2024 and 100 million tons by 2030. Vostok Oil's carbon footrpint will be 75% lowe...

Economics: Credit to the private sector extends its slide

MEXICO · Report · 14 Jun 2021

Recent indicators as of April regarding Mexico’s financial system continue to reflect the effects of low levels of economic growth. This poor performance results from a mistaken implementation of economic policy, the pandemic’s impact on the economy and ineffective economic reactivation programs,...

Inflation challenges the government and other weekly topics

BRAZIL POLITICS · Report · 14 Jun 2021

The Senate will attempt to vote on the provisional measure that allows for the privatization of Eletrobras. In the House, the rapporteur of Administrative Reform will present his work calendar. Deputies may also vote on the bill that deals with the ICMS on fuel. In the Judiciary, we highlight the...

MNB balance sheet suggests the forint has only limited potential upside left against the euro

HUNGARY · In Brief · 14 Jun 2021

The end-May balance sheet of the MNB was released today. We made a simple calculation to find out how much room is left for further potential forint strengthening against the euro. The result is that at EURHUF 350, the forint is almost as strong as the maximum level it can potentially reach. This...

The Full Adjustment of the Interest Rate: In Search of the Inflation Target

BRAZIL ECONOMICS · Report · 14 Jun 2021

At the next COPOM meeting (June 16), not only will the SELIC rate be increased by 75 basis points, there will also be announcement that the commitment is no longer to a partial adjustment, but rather to the adjustment necessary to bring inflation back to the target. This movement was already anti...

A clearer spot in the region

ECUADOR · Report · 14 Jun 2021

After two weeks in office, Guillermo Lasso registered the highest rate of approval since 1979. At 71.2% he was above Rafael Correa, who had 68% in his best days. In addition, two legislators from the Social Christian Party joined the official forces, which currently represent the second largest g...