Argentine budget projections will prove optimistic

2017 ◽  
Keyword(s):  
Public Debt ◽  
Tax Reform ◽  
Economic Recovery ◽  
Fiscal Deficit ◽  
Content Type ◽  
New Public ◽  
Primary Deficit ◽  
The Government ◽  
Interest Payments ◽  
Public Revenues

Subject The 2018 Argentine budget. Significance The Economy Ministry sent the draft 2018 budget to Congress on September 15. The budget indicates no major changes in fiscal policy; the primary deficit will fall by just 3.4% in nominal terms, driven by the effect of the economic recovery on public revenues, and by a reduction in energy and transport subsidies. By contrast, interest payments will rise, showing the increasing burden of the government’s decision to finance the fiscal deficit through new public debt. Impacts The budget shows a slight fall in tax pressure, so tax reform will be postponed until 2019 at least. The cut in energy and transport subsidies will boost inflation, making it more difficult for the Central Bank to achieve its target. The government will need to show its optimism is well-founded if it hopes to do well in the 2019 elections.

Fiscal risks worsen debt outlook in Argentina

2016 ◽  
Keyword(s):  
Interest Rates ◽  
Public Debt ◽  
Fiscal Rules ◽  
Content Type ◽  
Global Capital ◽  
Fiscal Adjustment ◽  
Financial Conditions ◽  
Export Taxes ◽  
Primary Deficit ◽  
The Government

Significance The lifting of export taxes and the recession have already undermined the government's goal of reducing the fiscal deficit: in 2016 the primary deficit-to-GDP ratio will be even higher than in 2015. However, low public debt-to-GDP ratios and a favourable global environment allowed the government to finance the deficit with new debt. Provinces have also actively tapped global capital markets, postponing fiscal adjustment. Impacts Rising global interest rates would force the government to accelerate unpopular fiscal adjustment. Even if global financial conditions do not worsen, lack of fiscal adjustment will eventually raise doubts about debt sustainability. The government's ability to enforce fiscal rules for provinces will depend on its performance in the 2017 mid-term elections.

Argentina debt deal hangs in balance amid COVID-19

2020 ◽  
Keyword(s):  
Sovereign Debt ◽  
Economic Recovery ◽  
Medium Term ◽  
Debt Restructuring ◽  
Content Type ◽  
The Government ◽  
Interest Payments

Significance The government announced its sovereign debt restructuring proposal on April 16, including a three-year moratorium, and an average haircut of 62% on interest payments (equivalent to 37.9 billion dollars) and 5.4% on capital (3.6 billion dollars). The proposal has already been rejected by the main bondholders, but Economy Minister Martin Guzman warns there will be no further offer. Impacts A deal would ease liquidity problems and facilitate access to fresh funds in the medium term, aiding post-COVID-19 economic recovery. A new default would hinder recovery and increase the risk of a new bout of hyperinflation. Global economic weakness will limit prospects for any export-led recovery.

Vested interests may block urgent tax reform in Jordan

2021 ◽  
Keyword(s):  
Economic Growth ◽  
Tax Evasion ◽  
Tax Reform ◽  
Living Standards ◽  
Economic Recovery ◽  
Political Crisis ◽  
Content Type ◽  
Vested Interests ◽  
Recent Developments ◽  
The Government

Significance It also looked at government-proposed amendments to another law aiming to reduce the scope for tax evasion in the Aqaba Special Economic Zone. Recent developments including the pandemic, an April political crisis between King Abdullah and his half-brother Prince Hamzah and now the Gaza conflict have highlighted popular dissatisfaction driven by economic grievances. Impacts Tourism should start to recover in late 2021, but revenue is unlikely to return to pre-pandemic levels until 2024 at the earliest. Forecast economic growth of 2-3% over the next four years leaves little scope for improvement in living standards. Without a strong economic recovery, the government will struggle to bring down an unemployment rate that has reached 24%.

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.

Economic recovery may prove vulnerable in Uruguay

2017 ◽  
Keyword(s):  
Economic Recovery ◽  
Fiscal Deficit ◽  
Content Type ◽  
Lower House ◽  
Breathing Space ◽  
The Government ◽  
Investment Grade

Significance President Tabare Vazquez’s government will face a congressional debate over the 2018-20 budget marked by the high fiscal deficit. Although ratings agencies are showing confidence by renewing Uruguay’s investment grade rating, this will only be maintained if an austere budget is approved -- at a time when the government has lost its lower house majority. Impacts The government faces unsatisfied demands from various sectors which cannot readily be addressed without increased investment and spending. This in turn would undermine the fiscal position, which has been improved by an adjustment that still did not resolve underlying issues. Some improvement in growth will give the government a degree of breathing space.

Costa Rica tax triumph will drive Alvarado’s ambition

2018 ◽  
Keyword(s):  
International Institutions ◽  
Tax Reform ◽  
Infrastructure Investment ◽  
Fiscal Deficit ◽  
Fiscal Consolidation ◽  
Public Infrastructure ◽  
Content Type ◽  
Investment Plan ◽  
Fiscal Reforms ◽  
The Government

Subject Tax reform. Significance President Carlos Alvarado's controversial and long-awaited tax reform passed on December 3. The new measures should help to improve Costa Rica’s fiscal situation, particularly curbing the widening fiscal deficit, and will be welcomed by investors and international institutions. Impacts With the reforms now looking certain, protest fatigue will set in, and union demonstrations will die down. The legislature is likely to rally behind Alvarado’s next initiative -- a public infrastructure investment plan. The government may try to pass supplementary fiscal reforms in 2019 to support fiscal consolidation.

India will stick to prudence amid fiscal crisis

2020 ◽  
Keyword(s):  
Economic Crisis ◽  
Public Debt ◽  
Fiscal Crisis ◽  
Economic Recovery ◽  
Fiscal Year ◽  
Medium Term ◽  
Content Type ◽  
Goods And Services ◽  
The Government ◽  
Market Liberalisation

Significance Meanwhile, the government is under pressure to raise expenditure to help ease the pandemic-related economic crisis. Delhi is reluctant to borrow more, as an increase in public debt could hurt its sovereign rating. Impacts India will struggle to avoid a heavy GDP contraction this fiscal year. In the medium term, some states may try to reclaim the powers of taxation they surrendered through the Goods and Services Tax. The government will count on market liberalisation to spur post-pandemic economic recovery.

Florida voters react to Biden's Caribbean policy

2021 ◽  
Keyword(s):  
Disaster Relief ◽  
Electoral Politics ◽  
The State ◽  
Pivotal Role ◽  
Economic Recovery ◽  
Short Term ◽  
Content Type ◽  
Family Connections ◽  
The Caribbean ◽  
The Government

Significance Many areas of the Caribbean have trade, investment and family connections with communities in Florida. As the state now plays a pivotal role in US electoral politics, crises in the region can take on added political importance for parts of Florida’s electorate. Impacts Forecasts of short-term economic recovery for Florida remain highly uncertain given the continuing impact of the pandemic. Clashing interests across the Caribbean may demand greater coordination of US policy than the government can currently offer. Healthcare and disaster relief capabilities within the state are severely overstretched and could be overwhelmed by a new crisis.

Dominican Republic tourism begins fragile recovery

2021 ◽  
Keyword(s):  
Dominican Republic ◽  
Economic Recovery ◽  
Infrastructure Investment ◽  
Health Minister ◽  
Slow Recovery ◽  
Content Type ◽  
The Government ◽  
Investment Programme

Significance Accounting directly and indirectly for 16-17% of GDP in 2019, tourism is a major plank of the Dominican economy and will be key to broader economic recovery in 2021. With that in mind, the government is striving to encourage visitors back as soon as possible. Impacts Cruises are less important to the Dominican Republic than some smaller islands, but the slow recovery of that sector will be a blow. The president plans to launch an infrastructure investment programme later this year to help boost employment. The dismissal of Health Minister Plutarco Arias over alleged procurement irregularities may undermine government anti-corruption pledges.

Nigerian oil rebound vital for economic recovery

2017 ◽  
Keyword(s):  
Niger Delta ◽  
Agricultural Sector ◽  
Economic Recovery ◽  
Content Type ◽  
Oil Companies ◽  
China And India ◽  
Relative Safety ◽  
Oil Sector ◽  
The Government ◽  
State Interventions

Significance Despite such controversies, the government is pinning hopes for economic recovery on restoring hydrocarbons production alongside longstanding plans to reduce the country’s dependence on oil. While large international oil companies are retreating to the relative safety of the deep offshore, the government will look to new partnerships with China and India for large infrastructure projects. Impacts Employment gains in the oil sector will be marginal compared to increases in the agricultural sector. Recent state interventions against oil majors are unlikely to deter future investment. Counter-insurgency operations against Boko Haram could distract from government peace efforts in the Niger Delta.

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