Mexican government to reinforce fiscal tightening

2016 ◽  
Keyword(s):  
Capital Markets ◽  
Fiscal Deficit ◽  
International Capital ◽  
Budget Cuts ◽  
Content Type ◽  
International Capital Markets ◽  
Fiscal Adjustment ◽  
Mexican Government ◽  
The Government ◽  
Primary Surplus

Significance A substantial fiscal tightening is being proposed, with the government seeking to reduce its fiscal deficit significantly and attain its first primary surplus since 2008. Impacts Heavy budget cuts will increase Pena Nieto's unpopularity. Pena Nieto is unlikely to achieve the close working relationship with Meade that he had with Videgaray. The fiscal adjustment will be tested when the government goes to the international capital markets to issue debt from January.

RUFO expiration will not end Argentina debt lawsuits

2015 ◽  
Keyword(s):  
Central Bank ◽  
Capital Markets ◽  
International Capital ◽  
Content Type ◽  
International Capital Markets ◽  
Debt Markets ◽  
Growth Prospects ◽  
The Government ◽  
Severe Shortage

Significance Debt markets have failed to pressure Argentina to end the impasse with holdouts, with the government arguing that it could not offer them new terms without offering similar concessions to holders of restructured debt. With elections scheduled for October, the current government is likely to kick the problem to its successor, leaving Argentina facing continued litigation in US and UK courts. Impacts The Central Bank has effectively managed drawdowns of dollar reserves, helping the government to maintain its hard line against holdouts. While this policy persists, the country will remain locked out of international capital markets. The severe shortage of dollars will continue, and will continue to dampen growth prospects until resolved.

IMF lending will prod Ukraine to sustain reforms

2017 ◽  
Keyword(s):  
Capital Markets ◽  
Armed Conflict ◽  
Government Support ◽  
Political Crisis ◽  
The Political ◽  
International Capital ◽  
Content Type ◽  
International Capital Markets ◽  
The Third ◽  
The Government

Significance After releasing 1 billion dollars in April, the IMF is urging Ukraine to implement land and pension reforms to make it eligible for further lending tranches. The government is finding it hard to pursue controversial changes opposed by many voters and taken up as causes by the political opposition. Gontareva's resignation reflects a lack of government support and is a setback for the reformist camp. Impacts The 'economic war' emerging alongside armed conflict in the east will dent prospects for growth and reform. Failure to secure further IMF financing could accelerate the planned return to international capital markets, perhaps in the third quarter. Attempts to push through reforms such as land sales may lead to increased political strife but not a full-blown political crisis.

Orthodox debt strategy may not pay off for Mexico

2020 ◽  
Keyword(s):  
Capital Markets ◽  
Public Debt ◽  
Fiscal Deficit ◽  
International Capital ◽  
Foreign Investors ◽  
Content Type ◽  
International Capital Markets ◽  
Borrowing Costs ◽  
Bond Issues

Significance Public debt increased from the second quarter of 2020, mainly due to the sharp economic contraction and peso depreciation. Impacts A debt downgrade would not cut off Mexico’s access to international capital markets, but it would increase borrowing costs significantly. Efforts to avoid a higher fiscal deficit, and debt, will weigh on growth expectations for 2021. As Mexico becomes less attractive for foreign investors, long-term bond issues in dollars will become more popular than those in pesos.

Pemex downgrades hit AMLO’s economic vision for Mexico

2019 ◽  
Keyword(s):  
Private Sector ◽  
Federal Government ◽  
Capital Markets ◽  
Oil Prices ◽  
International Capital ◽  
Content Type ◽  
International Capital Markets ◽  
The Government ◽  
The Impact ◽  
Death Knell

Subject Pemex downgrades Significance Ratings agency Fitch on June 6 downgraded the bonds issued by state-owned oil firm Pemex to BB+ from BBB-, pushing the rating into ‘speculative grade’ or ‘junk’ territory. The move came a day after Fitch downgraded the bonds of the federal government by one notch, to BBB from BBB+, citing the impact of Pemex’s financial prospects upon those of the government. Moody’s shifted its outlook for the government’s debt from stable to negative but maintained its A3 rating. Impacts The possibility of further downgrades will be a permanent shadow on the government’s economic actions at least until 2020. Any downgrading would have an impact on the borrowing costs of Mexican private sector companies in international capital markets. An abrupt fall in oil prices could be a death knell for Pemex, and would deal a significant blow to the exchequer.

Argentine debt success does not eliminate doubts

2016 ◽  
Keyword(s):  
Economic Policy ◽  
Policy Making ◽  
Fiscal Deficit ◽  
Bond Issue ◽  
Content Type ◽  
Fiscal Adjustment ◽  
Debt Default ◽  
Political Cost ◽  
The Government ◽  
Do So

Subject Economic policy-making. Significance The government in April successfully ended the long-running debt default through an agreement with the most intransigent holdout creditors and a bond issue worth 16.5 billion dollars, the largest in Argentina's history. Despite this step, doubts remain concerning the government's ability to reduce the huge fiscal deficit and even its willingness to do so, as renewed access to lending will allow it to ease fiscal adjustment, reducing the high political cost involved. Impacts There is a risk that, with the return of global lending, the government will choose to postpone fiscal adjustment. In the absence of a clear stabilisation plan, efforts to slow inflation will take time. If the economy does not rebound in coming months, the government's performance in October 2017 mid-term elections will be undermined.

Mexican fiscal orthodoxy to be maintained amid crisis

2020 ◽  
Keyword(s):  
Capital Markets ◽  
Public Debt ◽  
Public Spending ◽  
Country Risk ◽  
Economic Recovery ◽  
International Capital ◽  
Content Type ◽  
International Capital Markets ◽  
The Cost ◽  
Spending Cuts

Significance Public finances have not so far deteriorated as dramatically as they might have done, considering the economic contraction caused by the COVID-19 pandemic. This is explained partly by public spending cuts and one-off revenues that will not be repeated next year. Impacts Fiscal orthodoxy will not be rewarded by international capital markets, as anti-investment moves have hit confidence. Perceptions of country risk will continue to worsen, pushing up the cost of refinancing public debt. A slow post-pandemic economic recovery and lingering unemployment could weigh on the government’s popularity.

Budgets and Biopolitics

2011 ◽  
Author(s):  
Stephen J. Collier
Keyword(s):  
Social Welfare ◽  
Capital Markets ◽  
Structural Adjustment ◽  
International Capital ◽  
Government Budget ◽  
International Capital Markets ◽  
Neoliberal Reform ◽  
The Government ◽  
Formal Rationality ◽  
A Site

This chapter focuses on budgetary reform. In debates about neoliberalism and neoliberal reform, the government budget is often viewed as a key locus in which it is possible to observe the absolute antinomy between substantive provisioning and formal rationalization. “Budgetary austerity”—understood as a key component of structural adjustment and, thus, of neoliberal reform—presents an image of social welfare goals sacrificed to demands of scarcity (or the demands of international capital markets). However, seen in a somewhat broader view, it becomes apparent that the government budget—far from being a site in which these two forms of rationalization are opposed—is among the most critical sites in which the tricky relationship between formal rationality and substantive provisioning is constituted as an explicit target of technocratic reflection and management in modern states.

Regulatory uncertainty will hold back green bonds

2015 ◽  
Keyword(s):  
Capital Markets ◽  
Government Regulation ◽  
Financial Instruments ◽  
International Capital ◽  
Content Type ◽  
International Capital Markets ◽  
Regulatory Uncertainty

Subject The outlook for green bond financial instruments. Significance Issuance of 'green bonds' -- designed to help fund climate-friendly projects -- is rising, with more than 11 billion dollars raised in 2015, according to the Climate Bonds Initiative, an NGO that tracks such investments. The International Capital Markets Association (ICMA) in March issued voluntary green-bond standards to improve disclosure and transparency. Impacts Green-bond new issuance this year is on track to exceed 2014's 36.5 billion dollars. Investors are concerned that a lack of government regulation might lead to 'greenwashing' and other abuses by issuers. Investor interest in green bond offerings is strong, with oversubscription of green issuances expected to continue.

scholarly journals Sovereign default, domestic banks and exclusion from international capital markets

2020 ◽  
Author(s):  
Dominik Thaler
Keyword(s):  
Capital Markets ◽  
Sovereign Debt ◽  
Banking Sector ◽  
Quantitative Model ◽  
Sovereign Default ◽  
International Capital ◽  
International Capital Markets ◽  
Return On Capital ◽  
The Government ◽  
Domestic Banks

Abstract Why do governments borrow internationally, why do they temporarily remain out of international financial markets after default? I develop a quantitative model of sovereign default to propose a unified answer to these questions. In the model, the government has an incentive to borrow internationally since the domestic return on capital exceeds the world interest rate, due to a friction in the banking sector. Since banks are exposed to sovereign debt, sovereign default causes a financial crisis. After default, the government chooses to reaccess international capital markets only once banks have recovered and efficiently allocate investment again. Exclusion hence arises endogenously.

Risks of widespread protests will endure in Costa Rica

2020 ◽  
Keyword(s):  
Costa Rica ◽  
Credit Rating ◽  
Fiscal Deficit ◽  
International Capital ◽  
Tax Reforms ◽  
Fiscal Reform ◽  
Content Type ◽  
The Government ◽  
The Imf

Significance The move followed days of protests in response to plans for tax reforms designed to rein in the country’s burgeoning fiscal deficit. Impacts Protests will almost certainly return if the national dialogue is viewed as unsuccessful. The suspension of the IMF talks will encourage the government to look to other multilateral organisations for loans or aid. A lack of fiscal reform may weigh on Costa Rica’s credit rating, reducing its ability to raise international capital.

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