• Adjusting for the holiday and inflated invoicing shows that underlying trade dynamics are still healthy
• Inflated invoicing is contracting as banks become increasingly cautious
• We forecast GDP growth of 7.6% in Q1-2014...
President Park chose a technocratic BoK insider as the next governor, against market expectations
• Ju-yeol Lee is a moderate in terms of monetary policy; interest-rate cuts are unlikely in the near term
• We expect the BoK keep the base rate stea...
• China’s budgetary stance for 2014 is neutral; it forecasts a 2.1% deficit
• SOEs are still not contributing much to the MoF budget, but the situation is gradually improving
• The MoF is overhauling budget planning, improving transparency, cuttin...
• Growth is likely to remain sub-par at 5.3% and 5.9% in FY14 and FY15, respectively
• We expect no change in policy rates as the BB seeks to preserve macroeconomic stability
• A narrower current account surplus could put mild depreciation pressur...
• Macro prudential measures and steep policy tightening will constrain real GDP growth
• We do not envisage a recession scenario; fiscal expansion and exports will limit the downside risks
• Politics remain uncertain and could stress markets again...
• Although the election has taken place, the political conflict remains unresolved
• Yingluck’s political future is in the NACC’s hands as it probes the rice pledging scheme
• We cut our 2014 GDP growth forecast to 3.5%, as political gridlock is l...
Argentina’s economic crisis is not over; USD-ARS and local rates are likely to move higher
• Inflation is expected to spike, and the economy to contract; this is bad news for Brazil
• The trade links between Brazil and Argentina are significant
• Interim government plans a second EGP 30bn stimulus to revive economy; FY14 GDP projected at 3.5%
• USD 12bn financial aid from GCC states will support stimulus spending, strengthen FX reserves
• EGX 30 has rallied 63% since the interim govern...
• Qing China imported its money and had no monetary authority, but by 1750 its economy was globalised
• Economic crisis hit when massive silver imports reversed in 1810-50, and the monetary base contracted
• China’s economy has matured much since...
• Turkey is undergoing its worst political crisis since the AKP’s ascent to power
• Compounding the existing ‘tapering’ stress, this has led to a substantial market sell-off
• International perception of Turkey has been damaged; institutional inte...
This supersedes the version published on 9 December 2013. Figure 6, corrects estimated number of seats.
• Opposition BJP increases share of seats to 68% from 50% in four state elections; Congress fares poorly
• AAP makes an impressive debut in Del...
• Agriculture GDP is still the main cause of headline GDP growth volatility
• Subsidy reform is a central policy objective, and work should continue in 2014
• We are constructive on Morocco’s medium- to long-term outlook...
• The country’s hydrocarbon potential is massive and probably even higher than currently assessed
• But the security situation represents a risk to the oil-capacity expansion timeline
• Improving the operating environment should be a priori...
• Turkey’s growth has not decoupled from external imbalances
• We see a marginal improvement to 4% real GDP growth in 2014
• Any upside potential will be capped by tightening policy over the course of the year...
• Political transition success remains the key to higher GDP growth
• 2014 should bring some resolution to this process
• Official creditors and the international community should remain supportive...
• GDP drivers are still going to be affected by a tense regional situation
• Reform of the subsidy system, particularly in the energy sector, is crucial
• Lebanon’ financial system remains the backbone of the economy...
• 2014 growth should mildly suffer from a high base effect
• The economy’s dependence on the hydrocarbon economy has increased
• Long-term resolution of the domestic feuds is key to the non-oil economy ...
• Growth should benefit from a return to full hydrocarbon potential in 2014
• But given its wealth and GDP/capita, Algeria is arguably underperforming
• Political agenda will be driven by presidential election and the possible return of Bouteflika...
• House of Representatives votes 297-134 to reject a petition to censure PM Yingluck
• This should re-establish the government’s stability
• However, significant risks remain on the street if anti-government protests are prolonged
The Party’s Decision outlines the most significant wave of market reforms in two decades
• The CCP is putting more faith in the market than has any previous administration, though the strategy around SOEs is still unclear
• A wide range of financi...
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This report provides an economic outlook for more than 60 economies worldwide and investment implications for commodities, credit, equities, FX and interest rates markets in 2014. We expect a better 2014, with world economic growth picking up and inflation staying benign. Global growth should increase to 3.5% in 2014 from 2.7% in 2013, helped by improvements in economic activity in the US and Europe. A pick-up in growth in the West is good news for the rest of the world, and we expect emerging economies’ growth to outpace G7 growth by almost 4 percentage points.
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