GlobalSource Partners | Country Insights

Special points to highlight in this issue: * It seems that by now a market consensus has emerged – in China and abroad – that China’s economic recovery has been mainly a supply-side recovery, with the very weak demand side still struggling. * In response to this, Beijing has unveiled Xi J...

Maintaining of presidential veto means challenges in political articulation and aid program

BRAZIL POLITICS · Report · 21 Aug 2020

After the voting results in the Senate on August 19, in which the government was defeated in the vote on maintaining the veto to raise civil servants’ salaries, intense political articulation was implemented to reverse the result in the Lower House. The Planalto Palace was victorious and Presiden...

Lower House upholds veto on civil service salaries

BRAZIL POLITICS · Report · 20 Aug 2020

As we predicted, the Lower House has chosen to uphold (316-165) President Jair Bolsonaro's veto on salary raises for public servants. Yesterday, August 19, Senators voted to override the veto (42 for and 30 against), which represents a fiscal impact of R$ 130 billion (R$ 43 billion for the federa...

The Risk of Failing to Meet the Spending Cap

BRAZIL ECONOMICS · Report · 20 Aug 2020

The spending cap is not a self-applicable fiscal rule. It is a political commitment whose compliance in the coming years will require approval of a set of reforms necessary to impose fiscal austerity by controlling expenditures – not by increasing revenues – establishing conditions for faster eco...

Economy continued to recover in July, performance differed across sectors

RUSSIA ECONOMICS · In Brief · 20 Aug 2020

Rosstat released preliminary statistics on major economic indicators for July, which confirm that the Russian economy is on a recovery track, even though this recovery is not uniform across sectors.Agriculture was up 4.0% y-o-y last month, which brought the 7m20 tally to 3.3% versus 3.0% in 1H20....

Bank in Russia issues first loan backed by cryptocurrency

RUSSIA / FSU POLITICS · In Brief · 20 Aug 2020

On August 18 Lender Expobank lent money to Mikhail Uspensky. He offered Waves crypto tokens as security for the loan. The amount of the loan is secret. Lawyers were consulted before the issuance of the loan. Waves tokens are recognized as property and they have been deposited in an escrow account...

MPC: No hikes, liquidity steps to continue

TURKEY · In Brief · 20 Aug 2020

Broadly in line with expectations, the Monetary Policy Committee has left the policy rate (weekly-repo) unchanged today, and signaled that tightening through “liquidity measures” would continue instead (link to today’s statement is here).As regards the latter, in a step that has accompanied today...

Improvement in Bolsonaro’s popularity does not reduce economic pessimism

BRAZIL POLITICS · Report · 19 Aug 2020

Despite President Jair Bolsonaro’s popularity having reached its highest levels since the beginning on his term – the Datafolha and XP/Ipespe polls pointed out that the government’s great/good ratings reached 37% – there is pessimism in public opinion regarding the future of the economy. Accordin...

Sharply falling GDP, rising inflation, mixed financials

HUNGARY · Report · 19 Aug 2020

The domestic Covid-19 situation remains outstandingly favorable in a global and even in a European comparison, but the earlier steady improvement has clearly stalled recently. The daily number of new infections and the stock number of active cases have both started to rise moderately in recent we...

MPC Preview

TURKEY · In Brief · 19 Aug 2020 · 1 response

The Monetary Policy Committee (MPC) will hold its regular monthly rate-setting meeting tomorrow (August 20th). We expect the MPC to leave the policy rate (weekly-repo) unchanged, although we would not completely rule out a relatively modest hike. This is broadly in line with (the probability dist...

Russian industrial production down

RUSSIA / FSU POLITICS · In Brief · 19 Aug 2020

On August 18 the Russian Statistic Agency published data showing that industrial output fell 8% in July Y o Y. That is not as bad as May and June 2020 when it was 9.5% down Y o Y.Oil, gas and coal extraction is down more sharply than industrial production. Oil was down 165 Y o Y in July. The trou...

Bolsonaro and Guedes’s relationship is even more secure

BRAZIL POLITICS · Report · 18 Aug 2020

The meeting that took place on August 17 at the Planalto Palace between President Jair Bolsonaro and Minister of the Economy Paulo Guedes further reaffirmed the trust between them. When leaving the Planalto Palace, where he discussed measures to edit the funding in the budget, Guedes said, "The p...

OMAN: Cabinet reshuffled and VAT debated, but revenues collapse and Fitch downgrades

GULF COUNTRIES · Report · 18 Aug 2020 · 2 responses

There has been a flurry of Oman developments in the last few days, positive and negative, which are important to assess as the country prepares for a bond issuance in the relatively near future (well before its recently-closed $2bn bridge loan matures in mid-2021). Negative Fitch downgrad...

Finance Ministry cancels OFZ placement this week

RUSSIA ECONOMICS · In Brief · 18 Aug 2020 · 1 response

The Russian Ministry of Finance authorities decided not to conduct OFZ primary placement this week. To remind, last week the Finance Ministry failed to attract enough demand at reasonable yield and canceled the placement. This week the cancelation was made in advance. During the last three weeks ...

The problem of inflation

INDIA · Report · 18 Aug 2020

By law, the RBI is expected to deliver year-on-year CPI inflation in a range from 2 to 6 per cent. In recent months, headline inflation has often overshot above 6 per cent. Why has this happened? Petroleum product prices in India did not drop in line with the collapse in the world price of cru...