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COUNTRY INSIGHTS

Week of February 22
BRAZIL POLITICS · Report · 22 Feb 2016

Expectations are surrounding the return of the former leader of the government, Delcídio do Amaral, to the Senate. Budget cuts announced by the government will also be a subject of discussion. President Dilma Rousseff participates in the PT’s 36-year anniversary celebration. The party may announc...

The RMB and capital outflows
CHINA FINANCIAL · Report · 22 Feb 2016

- Beijing’s FX reserves are substantial, and recent concerns that they will very soon be depleted are overstated, although there is no question that if net outflows continue at current levels for many more months, we will have to start seriously reconsidering. - The idea, however, that Chi...

The Fiscal Crisis and a New Downgrade
BRAZIL ECONOMICS · Report · 22 Feb 2016

Standard & Poor’s lowered Brazil’s credit rating again, now to “BB”, two steps below investment grade, with a negative outlook. The announcement had virtually no effect on the markets: Brazil’s 10-year CDS quotation dipped 20 basis points and the real appreciated slightly. This behavior is no sur...

Further emphasis on loosening talk, no rate cut likely at tomorrow's MC meeting
HUNGARY · In Brief · 22 Feb 2016

At tomorrow's rate-setting meeting, the Monetary Council is unlikely to cut the 1.35% base rate, but it will most probably put further emphasis on its usual loosening talk, rewording their communique, reiterating previous commitments to use de-sterilization measures and swaps to ease monetary con...

The Year of Our Discontent
TURKEY · Report · 21 Feb 2016

The political context is highly chaotic and non-linear. We have decided to take Syria as our starting point, which reverberates through domestic politics as well as the budding relationship with the EU. The war in Syria will not end soon, but Turkey will not dare to enter the country and watch wi...

Unraveling the Fiscal Accounts and Interpreting the Economic Indicators
PANAMA · Report · 19 Feb 2016 · 1 response

Fiscal results presented by the Ministry of Economy and Finance (MEF) show two issues that do not properly allow grasping Panama’s real fiscal stance: the notion of adjusted deficit and the impact of turnkey projects. Moreover, nominal GDP estimated by the MEF for 2015 is under scrutiny, since it...

Still Digging
VENEZUELA · Report · 19 Feb 2016

President Maduro’s announcements ratify the policy status quo and confirm there’s little room to liberalize controls and to correct the distortions that underpin the government's alliances with interest groups profiting from them. At the same time, Luis Salas’s departure from the Cabinet hint tha...

Economics: Limited Fx, Rate Risk Near Term
MEXICO · Report · 18 Feb 2016

The slowing pace of global economic growth, rising interest rates on peso debt, peso depreciation and the growing cost of servicing dollar denominated debt could have a major impact on non financial private sector companies and on the Mexican financial system. Nevertheless, such additional extern...

Negative Outlook
COLOMBIA · Report · 18 Feb 2016

As expected, Standard & Poor’s recently revised Colombia’s outlook to negative, while affirming the foreign currency rating at BBB. The Ministry of Finance was quick to celebrate the BBB rating as supportive of this government’s economic policy. However, the risks of a subsequent downgrade should...

Business cycle conditions
INDIA · Report · 18 Feb 2016

The recession that began in 2012 has not ended. The best measures of business cycle conditions are constructed using data for non-financial non-oil listed firms, and by several measures, these indicate softness in the economy. Furthermore, balance sheet problems are reflected in the mismatch betw...

Politics: A Citizen Initiative as Gov’t Fails to Act
MEXICO · Report · 18 Feb 2016

More than eight months since the constitutional reform that presumes to deal with problems of corruption on the part of public servants and private actors was enacted, not a single secondary law has been passed that would allow for its implementation. Two key pieces of legislation needed to get t...

Academically, Ecuador Is Not In Crisis
ECUADOR · Forecast · 18 Feb 2016

President Rafael Correa, his ministers and the general manager of the Central Bank insist that “times are tough,” and that “the Ecuadorian economy is cooling off,” but also that the country has the means to overcome all problems. Correa even stated in an international TV interview that “academica...

Yet another terror strike clouds economic and political outlook
TURKEY · In Brief · 18 Feb 2016

Terror struck Ankara a second time in less than twelve months, this time right at the very center of the city, very close to the headquarters of the Chiefs of Staff and Grand Assembly. The death toll is currently 28, with 61 injured. No organization claimed responsibility for this shocking incide...

Monetary and fiscal announcement in Mexico puts the economy in the right track
MEXICO · In Brief · 17 Feb 2016

Banxico announced an unscheduled monetary policy decision of increasing domestic interest rates by 50 basis points and the Exchange Commission (formed by the Ministry of Finance and the Central Bank) announced the suspension of the existing FX auctions of up to USD$400m in daily USD and the launc...

Dilma wins with Picciani’s re-election
BRAZIL POLITICS · Report · 17 Feb 2016

Rep. Leonardo Picciani (RJ) was re-elected leader of the PMDB in the House for another year.An ally of the Planalto Palace and a congressman who is close with Dilma, he received 37 votes.He defeated Rep. Hugo Motta (PB), who has the support of the President of the House, Eduardo Cunha, but only o...

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