EM Country Research
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March 21, 2025 3:40 PM UTC
Bottom Line: As we predicted, Central Bank of Russia (CBR) kept the policy rate constant on March 21 for the third consecutive time to combat price pressures. CBR signaled that it is unlikely that further tightening is needed for disinflation, and stated that current inflationary pressures have decr
March 21, 2025 9:00 AM UTC
It appears that we will get bad news from April 2 on extra tariffs before any good news. Firstly, the announcement effect of tariffs for many countries and extra products will hurt U.S. business and consumer sentiment. Secondly, part of the reason for tariffs is extra tax revenue and to try to s
March 20, 2025 2:01 PM UTC
Bottom Line: Despite we thought it was likely that South African Reserve Bank (SARB) will cut the key rate from 7.5% to 7.25% during the MPC scheduled on March 20 as inflation remained below SARB’s target of 4.5% and core inflation continued to decelerate in February, SARB decided to keep the poli
March 19, 2025 3:40 PM UTC
Bottom Line: StatsSA announced on March 19 that annual South Africa’s inflation remained unchanged at 3.2% YoY in February while the main contributors were housing and utilities, food and non-alcoholic drinks, as well as services related to restaurants and accommodation. Taking into account that t
March 17, 2025 9:17 AM UTC
Headline industrial production and retail sales were better than expected, but the breakdown of the data shows a mixed picture for consumption and residential investment remains a negative drag on GDP before the 20% U.S. tariffs hits. Meanwhile, though the weekend policy announcement on boosting d
March 14, 2025 8:29 PM UTC
Bottom Line: Taking into account that annual inflation in January stood at 3.2% in January, which is below midpoint of target band of 3% - 6%, we think it is likely that South African Reserve Bank (SARB) will cut the key rate from 7.5% to 7.25% during the MPC scheduled on March 20 as inflation remai
March 13, 2025 10:10 AM UTC
Bottom Line: According to Russian Federal Statistics Service (Rosstat) data, inflation ticked up to 10.1% YoY in February after hitting 9.9% in January, remaining well above the Central Bank of Russia’s (CBR) midterm target of 4%, due to surges in services and food prices, huge military spending,
March 13, 2025 8:35 AM UTC
Models would suggest that the current and prospective direct tariff impact should slow GDP growth to a 1.5% pace, which should see slow Fed easing in 2025 given the boost to inflation. However, the policy uncertainty means that business and consumer behaviour could see a large adverse hit that keeps
March 12, 2025 10:43 PM UTC
Brazil's February CPI increased by 1.3%, the highest in 22 years, largely driven by the removal of subsidized electricity bills, which boosted Housing by 4.4%. The year-over-year inflation rose to 5.1%, above the BCB's target. Key contributors included Education (up 4.4%) and Food and Beverages (up
March 11, 2025 8:45 AM UTC
• The PBOC will likely cut slowly and gradually, as China seeks to avoid Yuan depreciation that could worsen the trade war with the U.S. Additionally, MOF last week forecast nominal GDP of 5%, which with a real GDP target of 5% means that MOF is also forecasting zero inflation. Close to
March 10, 2025 6:04 AM UTC
The Trump administration could decide to more broadly talk the USD down or less likely try to reach a cooperative Mar A Lago accord with big DM and EM countries. A more cohesive alternative is a forced currency deal for countries to appreciate their currencies to avoid more tariffs and withdraw
March 6, 2025 12:08 PM UTC
Bottom Line: After inflation softened more-than-expectations to 39.1% in February, the lowest in 20 months, the easing cycle continued on March 6 as Central Bank of Turkiye (CBRT) reduced the policy rate by 250 bps to 42.5%. The decision was supported by domestic demand remaining at disinflationary
March 6, 2025 7:55 AM UTC
China announced some fiscal stimulus to help meet the expected 5% GDP target for 2025. Overall, we have not been surprised by the fiscal stimulus measures announced so far from the March NPC, that have been towards the lower end of expectations. However, officials on Thursday have hinted that mo
March 4, 2025 12:02 PM UTC
Bottom line: South African economy grew modestly by 0.6% YoY in Q4 2024 driven by strong performances by agricultural sector and finance. According to Department of Statistics of South Africa (Stats SA) announcement on March 4, demand side of the economy was lifted by household consumption expenditu
March 3, 2025 11:14 AM UTC
Bottom line: Turkish Statistical Institute (TUIK) announced on March 3 that the inflation softened to 39.1% y/y in February from 42.1% y/y in January. We think lagged impacts of previous tightening, relative Turkish lira (TRY) stability, and less-than-expected hike in minimum wage in January contin
March 3, 2025 9:02 AM UTC
• Mexico and Canada are trying to frantically find solutions to delay across the board tariffs again, though the U.S. is hinting that the rate could be less than 25%. China extra 10% tariff remains likely, as the U.S. increases trade pressure on China. More tariffs also remain highly
February 28, 2025 12:03 PM UTC
Bottom Line: Turkish Statistical Institute (TUIK) announced on February 28 that Turkish economy expanded by 3.0% in Q4 2024, and 3.2% YoY in full-year 2024, backed by accelerated private consumption and robust investments, despite the weight of high interest rates.
February 28, 2025 9:05 AM UTC
· Trump eventually wants a trade deal with China and this could occur by the end of 2025, but the U.S. will ask for penalties if targets for U.S. imports to China are not met and this will lead to difficult negotiations. Reciprocal and product specific tariffs on China are also likely i
February 26, 2025 12:09 PM UTC
Bottom Line: StatsSA announced on February 26 annual South Africa’s inflation slightly accelerated to 3.2% YoY in January from 3.0% YoY in December and the main contributors were housing and utilities, food and non-alcoholic drinks, fuel and restaurant. We feel unpredictable outlook of the global
February 26, 2025 4:50 AM UTC
India's GDP saw a slight recovery in the last quarter of 2024, growing at 6.3% due to increased government spending. This rebound, however, still falls short of previous highs, reflecting the economy's reliance on state intervention amid weak private sector and consumer activity. Despite fiscal effo
February 25, 2025 2:33 PM UTC
Bottom Line: Russia and the U.S. have started negotiations to end the war in Ukraine. We continue to foresee a Russia-friendly peace deal in Ukraine sealed in 6-12 months following a cease-fire. We envisage Russia will continue to annex areas in and around four Ukrainian oblasts that it occupied,
February 25, 2025 9:30 AM UTC
• China is currently reluctant to see Yuan depreciation as it wants to get the U.S. to the negotiating table for a revised phase 1 trade deal and also over concerns about domestic capital outflows. Cuts to the 7-day reverse repo rate are now likely to be in 10bps steps and we look for the
February 24, 2025 8:27 AM UTC
· Our baseline remains of a Russia-friendly peace deal in Ukraine, but this need not lead to a weaker European security situation. This is our baseline (Figure 1), but does require Europe to make concessions to the Trump administration on defence spending increases and trade. However,
February 24, 2025 5:58 AM UTC
As U.S. President Donald Trump proposes reciprocal tariffs targeting nations like India, which impose higher duties on American goods, the trade relations between the U.S. and India face new tensions. This policy pivot coincides with efforts by Indian Prime Minister Narendra Modi to strengthen bilat
February 19, 2025 1:40 PM UTC
· Tariff reality in the spring and summer will likely be both tariff threats to negotiate trade deals and permanently higher tariffs in certain products and reciprocally to raise revenue for the U.S. government – along Peter Navarro guidance to Trump. The macro effects of this cou
February 17, 2025 10:28 AM UTC
· President Trump’s executive order on reciprocal tariffs has not produced much market reaction, both as the proposals will not be delivered to the president until April 1 and the process of Commerce/U.S. Treasury and Homeland Security input is seen reducing the odds of penal tariffs.
February 17, 2025 9:33 AM UTC
Bottom Line: According to Russian Federal Statistics Service (Rosstat) data, inflation ticked up to 9.9% YoY in January after hitting 9.5% in December, remaining well above the Central Bank of Russia’s (CBR) midterm target of 4%, due to surges in services and food prices, huge military spending,
February 14, 2025 10:45 AM UTC
Overall, we maintain the view that parts of China’s household sector are showing signs of a balance sheet debt consolidation, due to the excess buildup of debt in the past 20 years relative to disposable income. The non-financial corporate sector is more difficult to interpret, due to strengt
February 14, 2025 7:06 AM UTC
The BJP ended its 27-year drought in Delhi, winning 47 seats and breaking AAP’s dominance. The victory was driven by a united party front, strong RSS ground support, success in key voter blocs, including Sikh, Punjabi, and Dalit communities and the promise of freebies. AAP’s vote share fell to 4
February 13, 2025 3:03 PM UTC
Bottom Line: As we envisaged, U.S. president Trump and Russian president Putin talked over the phone on February 12 to discuss the war in Ukraine. According to sources, Trump and Putin agreed to have their teams start negotiations immediately. Under current circumstances, we foresee a Russia-friendl
February 13, 2025 4:12 AM UTC
India’s inflation cooled to 4.31% in January, clearing the way for more rate cuts as food prices dipped. The RBI is shifting focus to growth. But risks remain—rupee weakness and global commodity prices could still stir inflationary trouble.
February 12, 2025 4:56 PM UTC
India's FY26 budget is a strategic attempt to sustain economic expansion while maintaining fiscal consolidation, with the government targeting a nominal GDP growth of 10.1% and a real GDP expansion of 6.3%-6.8%. The budget continues its capex-led growth approach, increasing infrastructure investment
February 12, 2025 12:33 AM UTC
Brazil’s CPI rose 0.16% in January, lowering Y/Y inflation to 4.5% from 4.8%. A temporary electricity discount drove the decline, while Food (+1%) and Transport (+1.3%) showed worrying increases. Core inflation rose 0.7%, with Services CPI jumping to 5.4%, partly due to seasonal healthcare costs.
February 11, 2025 1:23 PM UTC
The 25% Steel and Aluminum tariff could have small to modest adverse inflation and GDP growth impacts on the U.S., but the prospect of reciprocal and more product and country tariffs create trade policy uncertainty/supply chain disruption and paperwork problems. This could amplify the impact of
February 11, 2025 8:30 AM UTC
The ECB staff forecasts on March 6 will be revised upwards for 2025 and 2026, due to the surge in wholesale gas prices. However, the ECB will likely take the view that 2 round effects from higher gas prices on balance are unlikely to boost core inflation (especially given wage tracker softness) an
February 10, 2025 3:08 PM UTC
Bottom Line: Central Bank of Turkiye (CBRT) released its first quarterly inflation report of the year on February 7, and revised its inflation forecast for 2025. CBRT now projects that inflation will stand at 24% at the end of 2025, 12% next year and 8% in 2027. CBRT governor Karahan said the revisi
February 10, 2025 7:55 AM UTC
The early days of the new Trump administration has seen lots of volatility around the on-off tariffs with Canada and Mexico, but the more stable U.S. Treasury market has helped provide an anchor. U.S. Treasuries have shift towards the view that the 10yr budget bill will be delayed until H2 and
February 8, 2025 9:39 PM UTC
Banxico cut the policy rate by 50bps to 10.5%, with a cautious stance and a split vote. Inflation has fallen but remains above target, expected to converge to 3.0% by Q3 2026. Global risks, including Trump’s tariff threats, add uncertainty. Despite economic weakness, some monetary tightening may s
February 7, 2025 7:22 PM UTC
Bottom Line: According to the figures announced by the Russian State Statistics Service (Rosstat) on February 7, Russia's GDP expanded by 4.1% YoY in 2024 driven by strong military spending, higher wages and fiscal stimulus. We envisage growth to hit 1.6% in 2025, which is significantly less than
February 6, 2025 2:30 PM UTC
New U.S. trade deals will likely make slow progress in reducing bilateral trade deficits as the underlying drivers behind the U.S. trade deficit are macro forces. While the U.S. economy outperforms other major trading partners; the value of the USD remains overvalued and as long as tariffs are
February 4, 2025 10:02 AM UTC
China’s targeted and measured counter tariffs against the U.S. are designed to push the U.S. towards the negotiating table on the wider issue of the U.S./China trade deficit. Negotiating will likely start into the spring, but negotiating will be tough as the U.S. wants a phase 2 deal with new ob
February 3, 2025 3:45 PM UTC
While innovation from China’s technology initiatives can provide help to cross over productivity, the benefit will likely only be modest due to the downgrading of the private sector in China and the lack of openness to inward trade. The structural slowdown in capital productivity will dominate
February 3, 2025 8:19 AM UTC
Bottom line: Turkish Statistical Institute (TUIK) announced on February 3 that consumer price index (CPI) softened to 42.1% y/y in January with education, health, and housing prices leading the rise in the index. We think lagged impacts of previous tightening, relative Turkish lira (TRY) stability,
January 31, 2025 2:28 PM UTC
The FY26 Budget comes at a crucial time for India’s economy, requiring a delicate balance between fiscal prudence and economic stimulus. As GDP growth moderates, inflation continues to impact disposable incomes, and global uncertainties persist, the government is expected to focus on targeted meas
January 29, 2025 1:24 PM UTC
Bottom line: After easing to 44.4% annually in December, we expect consumer price index (CPI) to cool further down to 41-42% y/y in January, which will be announced on February 3. We think lagged impacts of monetary tightening, relative Turkish lira (TRY) stability, and less-than expected hike in
January 27, 2025 7:01 PM UTC
Bottom Line: After Trump took the office as of January 20, we feel Ukraine war is not a priority in Trump’s agenda since he is most focused on his priorities of immigration and tariffs. We think Trump and Putin will likely meet in spring to discuss tha war in Ukraine and energy prices, and Ukraine
January 23, 2025 2:16 PM UTC
Global markets will be driven by policies and current valuation in 2025, especially new Trump administration policies. Trump could jawbone markets for a lower value of the USD and lower oil prices, which could have a temporary modest impact (joint US/Japan FX intervention is possible) but the stru