GlobalSource Partners | Country Insights

At its last meeting, the COPOM deleted the forward guidance – the commitment to keep the SELIC rate at 2% for an extended period – meaning that as soon as deemed necessary, the monetary authorities will proceed with monetary normalization. The current directors of the Central Bank have given stro...

Weathering the storm

CENTRAL AMERICA · Report · 26 Jan 2021

In El Salvador, we continue to perceive calm political conditions, a month before legislative and municipal elections. Despite serious fiscal problems, now aggravated by the pandemic, the absence of discussion of hot topics related to fiscal adjustment amazes us. As we’ve said in previous reports...

Finance Minister Ignacio Briones resigned

CHILE · In Brief · 26 Jan 2021

As expected, Finance Minister Ignacio Briones resigned on Tuesday to launch a presidential run. Briones’ political skills and common touch made him a valued addition to the government in the aftermath of the 2019 protests. His popularity has made him a natural choice as a presidential candidate f...

No policy change out of today's Monetary Council meeting.

HUNGARY · In Brief · 26 Jan 2021

The regular monthly rate-setting meeting of the Monetary Council today has resulted in a no-policy-change decision. Moreover, there has been very little novelty in the Council's statement as well, as that mostly repeated, or referred to, the MNB's recent statements, actions and predictions. All t...

The Russian industry contracted by 2.9% in 2020, as the OPEC+ deal pulled mining down while manufacturing grew moderately

RUSSIA ECONOMICS · In Brief · 25 Jan 2021

The contraction in 2Q20 and 3Q20 (by 6.7% and 4.8% y-o-y, accordingly) was deeper. After the initial shock caused by the pandemic in 2Q20, production was catching up almost all across the board. Mining was still down by 8.4% y-o-y in 4Q20 (and by 7.0% in 2020 as a whole). Manufacturing was up by ...

BoI FX purchases will most likely neutralize positive shekel fundamentals

ISRAEL · In Brief · 24 Jan 2021

We see the FX purchases neutralizing the CA surplus and net FDI. 2020 was an exceptional year with the CA surplus and FDI estimated at 40bn USD (double FX intervention of 21bn). We note that not all of the real inflows reach the FX market. Higher energy prices and a likely return of tourism in 2H...

The Controversy over the Appreciation of the Real

BRAZIL ECONOMICS · Report · 22 Jan 2021

The financial market has a tendency to forecast that the Real will get stronger in 2021. We don’t deny that international causes might lead to this result. The elevation of international commodity prices is producing gains in the terms of trade, causing the real exchange rate to appreciate, and t...

FDI in Russia lowest since 1994

CIS POLITICS · In Brief · 21 Jan 2021

On January 19 the Russian Central Bank (CBR) published statistics showing that foreign investment in 2020 was the lowest in 26 years. There was only USD 1.4 billion of FDI in 2020. That is partly owing to coronavirus. FDI in 2019 was USD 29 billion.However, the long-term pattern on FDI in Russia ...

The Russian ruble: settling in the comfort zone

RUSSIA ECONOMICS · Report · 19 Jan 2021

During the pandemic-hit 2020, the Russian economy demonstrated that its ability to absorb external shocks is rather strong, as its GDP contraction was moderate, while in the past decade it demonstrated that it lacks strong growth drivers as the average annual economic growth was quite unimpressiv...

Russian icebreaker sails the Northern Sea Route for the first time in January

CIS POLITICS · In Brief · 19 Jan 2021

On January 16 a ship completed a journey that was thought impossible at this time of year. Global warming has some upside for Russia. The LNG tanker Christophe de Margerie sailed from the Chukchi Sea to the Bering Strait.Moscow trumpeted the achievement. The Northern Sea Route will probably be na...

US sanctions Russian ship laying Nord Stream 2

CIS POLITICS · In Brief · 19 Jan 2021

On January 19 the US sanctioned the ship Fortuna. Fortuna is owned by KVT RUS. Germany has expressed its disappointment. Nord Stream 2 will carry LNG from Russia to Germany. This is crucial for German energy policy. The USD 11 billion pipeline is 95% complete.There are asset freezes and visa rest...

The current account widens in 4Q20 as exports grow

RUSSIA ECONOMICS · In Brief · 19 Jan 2021

The Central bank released its first estimate of the 2020 balance of payments. The current account was in surplus at $32.5bn, and the figure is close to what GKEM Analytica expected (around $35bn or 2.4% of GDP). Meanwhile, in 2019 the current account surplus was twice as wide – $64.8 bn.The trade...

Economics: 2021 Economic prospects and hurdles

MEXICO · Report · 18 Jan 2021

It will take a lot more than a successful Covid-19 vaccination drive to get the Mexican economy back on a firm recovery path, and an effective inoculation campaign is by no means certain at this point. Obviously the 2021 outlook will be determined by many moving parts, ranging from the strength o...

Politics: 4T Agenda, past, present and Future

MEXICO · Report · 18 Jan 2021

President López Obrador made a public commitment last September to pass by the end of 2020 all of the essential constitutional reforms and legislative bills comprising the basic structure of what he has long promised will be the fourth historical transformation of Mexico. But although he has tak...

The government against the ropes and other weekly topics

BRAZIL POLITICS · Report · 18 Jan 2021

Expectations surround the beginning of vaccinations against Covid-19 this week. In the economy, we highlight the Central Bank meeting to set the benchmark interest rate. On Wednesday, Joe Biden will be inaugurated as President of the United States. This week's Talking Points * The governme...