Earthquake may add to fiscal woes in Ecuador

2016 ◽  
Keyword(s):  
Budget Deficit ◽  
Aggregate Demand ◽  
Public Spending ◽  
State Funding ◽  
Oil Price ◽  
Right Wing ◽  
External Financing ◽  
Content Type ◽  
Downward Pressure ◽  
Spending Cuts

Significance Thousands protested in early April against government plans to increase tax, the latest sign of rising tensions following the collapse of oil prices, the widening of the budget deficit and cuts in public spending. The move to austerity, which began in early 2015, has improved public finances. However, spending cuts have created problems for sectors reliant on state funding and efforts to raise taxes to balance the books have been opposed. Impacts Austerity will drain aggregate demand and place downward pressure on growth. Right-wing opposition will use the fallout from the oil price collapse to make the case for a smaller state and less regulated economy. Tax increases will be unpopular with voters, but may help to secure external financing.

Russia's budget reflects caution on future spending

2016 ◽  
Keyword(s):  
Budget Deficit ◽  
Public Spending ◽  
Oil Price ◽  
Economic Recovery ◽  
Education Spending ◽  
Monetary Policies ◽  
Content Type ◽  
Low Levels ◽  
Spending Cuts

Significance A three-year budget cycle is intended to create predictability after a year in which the initial budget had to be revised as the oil price outlook grew gloomier. Spending cuts are envisaged to continue beyond 2017 as revenue predictions are modest amid low rates of economic growth, and the objective is to cut the budget deficit progressively. Impacts The diversion of reserve money to sustain public spending will undermine economic modernisation programmes. Low levels of health and education spending will harm human capital in the medium-to-long term. The Central Bank is unlikely to relax monetary policies significantly prior to 2018, and then only if inflation recedes to the targeted 4%. Tight monetary policy will restrict credit growth and thus economic recovery.

Oreskovic government in Croatia may prove short-lived

2016 ◽  
Keyword(s):  
Political Instability ◽  
Public Spending ◽  
Economic Restructuring ◽  
Right Wing ◽  
Case Scenario ◽  
Content Type ◽  
Growth Prospects ◽  
The Government ◽  
Social Conservatism

Significance After protracted negotiations, Croatia, at last, has a government, comprising the conservative Patriotic Coalition -- the Croatian Democratic Union (HDZ), plus a few small parties -- and the centre-right Bridge ('Most') of Independent Lists. The government is unusual because it is led by a non-partisan figure, Tihomir Oreskovic, a businessman who grew up in Canada and has only a shaky grasp of the Croatian language. In a best-case scenario, the government could deliver important and necessary reforms. Impacts Efforts to cut public spending will reduce the risk of a damaging financing crisis. A programme of economic restructuring will boost Croatia's long-term growth prospects. The election of two right-wing parties will consolidate the drift towards social conservatism. Tensions in the coalition will perpetuate political instability and could precipitate new elections.

Oil price prompts 2016 spending cuts in Mexico

2015 ◽  
Keyword(s):  
Oil Price ◽  
Content Type ◽  
Spending Cuts

Headline MEXICO: Oil price prompts 2016 spending cuts

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.

Petrobras Brazil plan opens more queries than answers

2015 ◽  
Keyword(s):  
Management Plan ◽  
Oil Price ◽  
Annual Production ◽  
Content Type ◽  
Car Wash ◽  
Will Force ◽  
Oil Company ◽  
Spending Cuts ◽  
Business And Management

Subject The outlook for Petrobras. Significance Following the steep fall in the oil price and impact of the 'Car Wash' corruption scandal, state-controlled oil company Petrobras has announced a scaled-back 2015-19 business and management plan. Credibility is a major issue: Petrobras has missed its annual production targets since the Workers' Party (PT) came to power in 2003. Impacts Petrobras's spending cuts will conflict with government efforts to stimulate the struggling economy. The announcement of the new plan suggests that the new CEO will adopt a more realistic strategy. Reduced refining investment will force Petrobras to continue importing refined products, sold at a loss.

Oil price drop piles more pressure on Iran's economy

2015 ◽  
Keyword(s):  
Oil Price ◽  
Fiscal Year ◽  
Subsequent Reduction ◽  
Political Will ◽  
Content Type ◽  
Parliamentary Elections ◽  
Efficient Management ◽  
The Government ◽  
Oil Revenues ◽  
Spending Cuts

Significance Iranian officials appear to have been caught off guard by the collapse in oil prices. The draft budget for the fiscal year 2015-16 (March-March) was presented to the legislature last December based on an estimated oil price of 70 dollars per barrel. It is now being hastily revised based on 40 dollars per barrel. The subsequent reduction in forecast revenues makes significant spending cuts and revenue raising necessary. However, with a nuclear agreement yet to be sealed and parliamentary elections on the horizon in 2016, questions remain over whether the government will have the political will to carry out such measures. Impacts The fall in oil revenues will reduce the Central Bank's ability to counteract further falls in the exchange rate. Inflation is likely to rise, reducing the government's spending power further. Rouhani's credibilty rests on efficient management of the economy and his ability to engineer a recovery. With elections due in 2016, proposed spending cuts are likely to face stiff resistance in parliament that will slow the budget's passage.

Pre-election woes are rising in Trinidad and Tobago

2015 ◽  
Keyword(s):  
National Security ◽  
Prime Minister ◽  
Attorney General ◽  
Public Spending ◽  
Content Type ◽  
Police Investigations ◽  
New Information ◽  
General Elections ◽  
The Government ◽  
Spending Cuts

Subject Fall-out from the recent scandals affecting the cabinet. Significance Just months before a general election is due, the government of Prime Minister Kamla Persad-Bissessar is in turmoil owing to a scandal involving former attorney-general Anand Ramlogan and ex-minister of national security Gary Griffith, both implicated in witness tampering allegations. The prime minister removed both men from office, and then undertook a wider cabinet reshuffle. Impacts The government may yet recover, with more than six months until general elections must be held. However, public spending cuts are likely to undermine recovery and the government's approval. Police investigations could reveal new information that damages the government's credibility further.

Libyan unity government could curb public spending

2015 ◽  
Keyword(s):  
Foreign Exchange ◽  
Oil And Gas ◽  
Public Spending ◽  
Foreign Exchange Reserves ◽  
Foreign Reserves ◽  
Medium Term ◽  
Fiscal Health ◽  
Content Type ◽  
Annual Budget ◽  
Spending Cuts

Significance The two largest oil ports, Ras Lanuf and Es Sider -- with a combined capacity of 600,000 barrels per day (b/d) -- are still closed due to fighting between rival factions, even though the UN-sponsored dialogue for a unity government is progressing. Libya is heavily dependent on oil and gas exports; 95% of its annual budget is generated from hydrocarbons. The decline in world oil prices since mid-2014, and the likelihood that oil will remain below 70 dollars per barrel in 2015, mean that Libya will further drain its foreign exchange reserves -- or make large spending cuts. The former is the easier choice. Impacts Financing from foreign reserves has been a policy since June 2014, but it is unclear how much of it has been spent. The use of foreign exchange reserves will prevent a budget crisis in 2015. Over the medium term, fiscal health will deteriorate.

Moreno will aim for first-round win in Ecuador

2016 ◽  
Keyword(s):  
Public Debt ◽  
Public Spending ◽  
Vice President ◽  
Presidential Candidate ◽  
External Financing ◽  
Content Type ◽  
Economic Slowdown ◽  
The Government ◽  
The Right ◽  
Ruling Party

Subject Presidential hopefuls. Significance On October 1, Ecuador's ruling party, Alianza Pais, nominated former Vice President Lenin Moreno as its presidential candidate in the elections of February 19. The news has boosted the government, raising hopes of a victory in the first round of the elections. However, the possibility a candidate from the right winning in a second round cannot be discounted. Impacts Managing the economic slowdown will be one of the main challenges for the government in the lead-up to the election. Securing external financing and maintaining relatively high levels of public spending will remain a priority. Opposition candidates will try to make gains from the economic slowdown, the rise in public debt and corruption allegations.

Ecuador migrant crisis to compound Moreno’s problems

2018 ◽  
Keyword(s):  
Public Spending ◽  
Easy Access ◽  
Local Elections ◽  
Right Wing ◽  
Content Type ◽  
Transit Route

Significance Ecuador is an attractive destination for Venezuelans, offering easy access to US dollars. It is also a transit route for migrants travelling to Peru and Chile. The migrant surge adds to President Lenin Moreno's challenges, as he tries to reduce public spending, stimulate the economy and tackle a security crisis on the Colombian border. Impacts Migration will be a key topic in next year’s local elections with right-wing candidates likely to benefit. Migration may tighten the Venezuelan government’s grip on power, removing likely dissenters and boosting remittances. Tensions between Colombia, Ecuador and Peru may increase as each country attempts to limit migrant numbers.

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