Petrobras undermines Brazil's investment efforts

2015 ◽  
Keyword(s):  
At Risk ◽  
Private Sector ◽  
Investor Sentiment ◽  
Commodity Prices ◽  
Foreign Investors ◽  
Content Type ◽  
Brics Countries ◽  
The Us ◽  
The World ◽  
The Government

Significance A lagging economy, declining global commodity prices and the crippling corruption crisis affecting state-owned oil giant Petrobras (estimated at 17 billion dollars in losses) have compelled the government to travel the world seeking investments. This combination has transformed what Brasilia had expected to be a revenue windfall into a shortfall, persuading the formerly inward-looking government to pursue external investment sources, including the US private sector and other BRICS countries. Impacts Brazil's current woes may represent an opportunity for foreign investors. However, the Petrobras scandal will continue to undermine investor sentiment. Current private forecasts point to recession both this year and next. Corruption claims could yet put the government at risk.

New party could shift Zimbabwe's political balance

2016 ◽  
Keyword(s):  
Foreign Investment ◽  
Commodity Prices ◽  
Vice President ◽  
Food Aid ◽  
Content Type ◽  
The World ◽  
Political Patronage ◽  
People First ◽  
The Government ◽  
Ruling Party

Subject Political outlook in Zimbabwe. Significance On February 17, former Vice President Joice Mujuru formally launched a new party -- Zimbabwe People First (ZPF) -- to contest the 2018 election. Usually, such announcements are met with scepticism, given the failure of past attempts to unseat President Robert Mugabe's ZANU-PF party. However, unprecedented divisions within the ruling party mean ZPF may pose a real electoral challenge. Impacts The government's wholesale takeover of the Marange diamond fields could provide fresh opportunities for political patronage. New rules imposing taxes on around 40 imported basic foods means that the government could benefit financially from emergency food aid. Several G40 members could benefit from Zhuwao's stricter indigenisation rules, which bans foreign investment in 'protected' sectors. Such regulation, together with the drought and weak commodity prices, means GDP growth could fail to reach the World Bank's 1.5% forecast. Mugabe's lavish birthday celebrations will fuel public anger -- given the current food crisis -- possibly boosting opposition support.

US Fed will struggle to raise rates much in 2016

2016 ◽  
Keyword(s):  
Interest Rates ◽  
Investor Sentiment ◽  
Commodity Prices ◽  
Federal Funds ◽  
Federal Funds Rate ◽  
Content Type ◽  
The Us ◽  
The Face ◽  
Lift Off ◽  
China’S Economy

Subject US monetary policy outlook for 2016 and its global impact. Significance There is a large discrepancy between the US Federal Reserve (Fed)'s estimates for interest rates at end-2016 and the expectations of bond investors. The latter are anticipating less tightening than the 100-basis-point (bp) rise in the Federal Funds rate the Fed has pencilled in for this year. Despite a successful rates 'lift-off' on December 16, the Fed faces many challenges in raising rates in the face of mounting stress in credit markets, disinflationary pressures from the plunge in commodity prices and a contraction manufacturing. Impacts While the Fed will tighten policy, other central banks, including the ECB, will provide further stimulus, accentuating policy divergence. Investors will price in a more hawkish Fed if US inflation accelerates faster than expected, potentially leading to a sell-off. Concerns about China's economy and the commodity prices slump will also shape investor sentiment.

New Kazakhstan privatisations will interest investors

2015 ◽  
Keyword(s):  
Private Sector ◽  
Large Scale ◽  
Public Spending ◽  
Foreign Minister ◽  
Economic Recovery ◽  
Successful Implementation ◽  
Foreign Investors ◽  
Content Type ◽  
Privatisation Programme ◽  
The Government

Subject Potentially interesting IPOs in Kazakhstan. Significance On November 24, Kazakhstani Deputy Foreign Minister Alexey Volkov said that a new round of large-scale privatisations would help stimulate the development of the private sector. Given that the price of oil is likely to stay low for some time, optimisation of public spending is a key priority for Astana. The government's planned exit from state-owned enterprises should also bolster the latter's management and profitability. Impacts The privatisation programme may enable the government to refocus efforts on economic recovery. Corruption will remain a principal obstacle to the successful implementation of privatisation plans. Proximity to political influencers will be a valuable asset for foreign investors keen to partake in the privatisation drive.

Zimbabwe's economic rebound faces multiple hurdles

2018 ◽  
Keyword(s):  
Human Rights ◽  
Investor Sentiment ◽  
Commodity Prices ◽  
Debt Relief ◽  
Fiscal Consolidation ◽  
Content Type ◽  
The Us ◽  
Run Up ◽  
Policy Targets

Subject Zimbabwe economic update. Significance Improving investor sentiment following new President Emmerson Mnangagwa’s initial reforms reflects pent-up foreign appetite for access to Zimbabwe’s vast mineral assets, amid improving global commodity prices. However, Western governments are unlikely to endorse the government’s policies until tangible progress emerges on outstanding human rights and governance concerns. Weak fiscal consolidation measures and over-optimism regarding policy targets are holdovers from former President Robert Mugabe's tenure that could weaken the credibility of longer-term reform plans, particularly when it comes to securing debt relief. Impacts The US extension of sanctions against Mnangagwa and his officials over governance issues is a blow to fledgling investor hopes. Inflationary pressures, after the long deflation, may further impinge on growth by dampening disposable incomes. Spending pressures in the run-up to elections could increase issuance of bond notes, which already exceed their 200,000-dollar limit by 45%.

Somalia faces long road to economic reconstruction

2018 ◽  
Keyword(s):  
Private Sector ◽  
Economic System ◽  
Institutional Capacity ◽  
Government Revenue ◽  
Business Sector ◽  
Policy Reforms ◽  
Content Type ◽  
Doing Business ◽  
The World ◽  
The Government

Significance Despite the government’s genuine efforts to implement policy reforms, low to non-existent institutional capacity will continue to impede the emergence of a more formalised economic system. Immediate challenges include increasing government revenue and rebuilding the financial sector to support public services and private sector expansion. However, the government will face stiff opposition from the small but powerful unregulated business sector, who want to maintain tax-free operations. Impacts Built-up salary arrears from successive over-optimistic budgets may jeopardise the hard-won security gains needed to reap peace dividends. Agreements by airlines and telecoms to pay taxes could weaken the position of other hitherto uncooperative sectors. Somalia’s last place in the World Bank’s doing business rankings obscures the potential of the vibrant private sector.

Exogenous risks loom over Indonesia’s foreign debt

2016 ◽  
Keyword(s):  
Public Sector ◽  
Private Sector ◽  
Public Debt ◽  
Foreign Debt ◽  
Commodity Prices ◽  
Household Debt ◽  
Fiscal Deficit ◽  
Content Type ◽  
Private And Public ◽  
The Government

Subject Outlook for Indonesia's foreign debt distress. Significance Indonesia’s total foreign debt reached 325.3 billion dollars by end-September, up 7.8% from the same period last year, according to Bank Indonesia data. This debt is spread almost equally between the private and public sector: 163.1 billion dollars and 162.2 billion dollars respectively. However, while private sector debt is falling, public debt is rising. Impacts Private miners are unlikely to invest heavily in smelters unless they are certain of an uptick in commodity prices. Raising the legal fiscal deficit limit beyond 3% of GDP will be politically difficult for the government. Household debt is unlikely to rise substantially in 2017.

Interest rates will continue to rise in Brazil

2021 ◽  
Keyword(s):  
At Risk ◽  
Central Bank ◽  
Interest Rates ◽  
Public Spending ◽  
Investor Sentiment ◽  
Similar Rate ◽  
Income Transfer ◽  
Content Type ◽  
The Public ◽  
The Government

Significance The increase, the largest since 2002, comes despite low growth expectations and reflects concerns over rising inflation, with the Central Bank warning of a similar rate rise in December. Investors are concerned by governmental proposals to breach the public spending cap to pay for a new income transfer programme, Auxilio Brasil (Brazil Relief). Impacts Rising prices will fuel popular dissatisfaction with the government. Higher interest rates will affect both growth and debt prospects. The need to finance pre-election social assistance programmes will put investor sentiment at risk

China’s demographic challenge may be manageable

2020 ◽  
Keyword(s):  
Private Sector ◽  
East Asia ◽  
Population Ageing ◽  
Foreign Investors ◽  
Content Type ◽  
Mutual Learning ◽  
Economic Output ◽  
The Government ◽  
Demographic Challenge ◽  
A Share

Significance The decline in the workforce as a share of the population will take a toll on economic output and put pressure on government finances. Impacts Population ageing creates pressure to open up new areas of finance and healthcare to private sector and foreign investors. The government could, if necessary, resort to privatising state-owned assets to raise revenue. There is scope for mutual learning and cooperation between China and other rapidly ageing countries, in East Asia and Europe especially.

South African government’s GBV plans may disappoint

2021 ◽  
Keyword(s):  
Civil Society ◽  
Private Sector ◽  
South African ◽  
Foreign Investment ◽  
Gender Based Violence ◽  
Content Type ◽  
Management Structure ◽  
National Strategic Plan ◽  
The Government ◽  
Gender Based

Significance Although President Cyril Ramaphosa has publicly committed to increase funding to combat what he calls South Africa’s “second pandemic”, there is a lack of transparency in how the government disburses funds linked to its National Strategic Plan (NSP) on Gender-based Violence and Femicide. Impacts Civil society groups will increase pressure on the government to make expenditure on GBV programmes more transparent. A new private-sector fund to contribute to the NSP has received strong early support, but its management structure is opaque. High levels of GBV will not only have significant humanitarian and social costs but may deter much-needed foreign investment.

Sonko protests will embolden Senegal’s opposition

2021 ◽  
Keyword(s):  
At Risk ◽  
Content Type ◽  
Targeted Attacks ◽  
The Government ◽  
Public Disorder ◽  
Unemployed Youth ◽  
Roll Out

Significance He had been arrested for disrupting public disorder and attending an illegal demonstration after protests erupted as he responded to a court summons concerning rape allegations. His arrest and detention has triggered wider unrest and a public backlash against President Macky Sall and his government. Impacts Sall will increase budgetary spending to try to appease the growing numbers of unemployed youth. Deep public mistrust of the government could hamper COVID-19 vaccine roll-out. With anti-French sentiment increasing, French businesses will be at risk of further targeted attacks during protests.

Sign in / Sign up

Export Citation Format

Share Document