Iran will be flexible in observing its planned budget

2019 ◽  
Keyword(s):  
Central Bank ◽  
Economic Conditions ◽  
Fiscal Year ◽  
Islamic Revolution ◽  
Content Type ◽  
Balanced Budget ◽  
Government Concessions

Significance Rouhani in late December 2018, when presenting his programme to the Majlis, reported that his administration plans to run a balanced budget for the fiscal year beginning March 21. Impacts The Islamic Revolution Guard Corps (IRGC) will maintain its key role in all areas. Deteriorating economic conditions will drive further protests, prompting more government concessions. Government borrowing will be drawn from the Central Bank and is likely ultimately to drive further inflation.

Iran’s hopes of swift economic recovery will be dashed

2021 ◽  
Keyword(s):  
Economic Policy ◽  
Vaccination Campaign ◽  
Economic Recovery ◽  
Fiscal Year ◽  
Islamic Revolution ◽  
Content Type ◽  
The Us ◽  
Supreme Leader

Significance His government is in an impasse with the conservative parliament over the draft budget for the new fiscal year beginning on March 21. Rouhani needs the US sanctions to be lifted fast and a COVID-19 vaccination campaign to allow for an exit from the pandemic in order to meet his economic promises. Impacts The supreme leader will become even more closely involved in shaping economic policy, with the autarkic ‘resistance’ narrative dominant. Khamenei may seek a new ‘jihadi manager’ president, linked to the Islamic Revolution Guard Corps (IRGC), who follows his economic vision. Progress with vaccinations, which began on February 8, will likely be slow, as supplies have become highly politicised.

Political deadlock undermines Costa Rican reform

2015 ◽  
Keyword(s):  
Monetary Policy ◽  
Central Bank ◽  
Tax Reform ◽  
Costa Rican ◽  
Policy Changes ◽  
Fiscal Reform ◽  
Content Type ◽  
Broad Agreement ◽  
Political Consensus ◽  
Government Concessions

Subject The outlook for fiscal reform. Significance In its revised 2015-16 macroeconomic programme, the Costa Rican Central Bank recently called for political consensus to achieve fiscal reform. While there is broad agreement on the need for measures to reduce the deficit, political pressures undermine the prospects for approving a meaningful fiscal package. Impacts Some tax reform is likely, though this will require tough negotiations and government concessions. Growth will remain lacklustre, but start to recover towards the end of the year. Despite recent low inflation, monetary policy changes are unlikely.

Turkey's new central bank governor may loosen policy

2016 ◽  
Keyword(s):  
Central Bank ◽  
Financial Markets ◽  
Interest Rates ◽  
Commercial Banks ◽  
Prime Minister ◽  
Economic Conditions ◽  
Content Type ◽  
Lending Rate ◽  
Inflation Targets ◽  
Central Bank Governor

Significance Cetinkaya is an apparent compromise between President Recep Tayyip Erdogan and Prime Minister Ahmet Davutoglu. The MPC cut the overnight lending rate by 50 basis points to 10%, leaving other rates unchanged. Financial markets welcomed the decision in the hope that Cetinkaya would avoid more radical rate cuts that could make the lira plummet and further endanger inflation targets. Impacts Policy rate cuts will have little impact on growth given other risks and factors, particularly external financial and economic conditions. No serious effort will be made to reduce inflation to 5%, until and unless this becomes a government priority. Given better dialogue between government and TCMB, blame for high interest rates may fall increasingly on commercial banks.

Pakistan will struggle to widen tax base

2019 ◽  
Keyword(s):  
Central Bank ◽  
Financial Support ◽  
Budget Deficit ◽  
Annual Growth ◽  
Fiscal Year ◽  
Tax Base ◽  
Content Type ◽  
Revenue Collection ◽  
The Government

Significance He will release a mini-budget on January 23. Revenue collection in the first half of fiscal year 2018/19 (July-June) showed 3.8% annual growth. The government targets a budget deficit of 5.1% of GDP for 2018/19, down from 6.6% in 2017/18. Impacts Financial support from allies will shape Pakistan’s diplomacy, Islamabad likely to align more closely with Saudi policy. By avoiding an IMF bailout for now, Pakistan would be able to avoid US pressure during talks with the Fund. The central bank will likely undertake monetary tightening.

Bangladesh risks growth by not confronting bad debt

2019 ◽  
Keyword(s):  
Central Bank ◽  
Banking Sector ◽  
Banking System ◽  
Fiscal Year ◽  
Gdp Growth ◽  
Potential Growth ◽  
Content Type ◽  
High Court ◽  
The Government ◽  
Bad Debt

Subject Bad debt in Bangladesh's banking sector. Significance The High Court last month stayed until June 23 a circular issued by the Bangladesh Bank, the central bank, that appeared to benefit borrowers who had defaulted on loans from the country's banking system. Meanwhile, Bangladesh registered 7.9% GDP growth in the fiscal year ending June 2018. Impacts The government will dismiss worries about a potential growth slowdown, pointing to forecast GDP growth of 8.1% in 2018/19. The Bangladesh Bank's circular would hurt banks already burdened with losses because of provisioning against bad debt. Banks may try to reduce their exposure to single borrowers.

Iran’s new president has few viable economic options

2021 ◽  
Keyword(s):  
Economic Growth ◽  
Exchange Rate ◽  
Central Bank ◽  
Research Centre ◽  
Fiscal Year ◽  
Content Type ◽  
Price Increases ◽  
Official Exchange Rate ◽  
Capital Spending ◽  
Central Bank Governor

Significance He promised not to borrow any more from the central bank; to consider revising the official exchange rate; and to amend the budget bill to address the mounting deficit, projected to reach USD17bn in the current fiscal year ending March 2022, according to a September report by the Majlis Research Centre. Impacts Further price increases and rising poverty will increase social tensions. The new central bank governor could impose interest cuts justified in terms of sharia-compliance. Austerity measures including reduced capital spending will weigh on slow-recovering economic growth. Some bankrupt government-owned entities will close, resulting in redundancies.

Australia budget keeps defence spending commitments

2021 ◽  
Keyword(s):  
South China Sea ◽  
Interest Rates ◽  
Fiscal Year ◽  
National Politics ◽  
Content Type ◽  
Defence Spending ◽  
Low Interest Rates ◽  
Defence Expenditure ◽  
Conducive Environment ◽  
Made In

Significance With an election due soon, the governing Liberal-National Coalition’s pledge to ring-fence the defence spending commitments made in 2016 was under some pressure. However, defence spending in fiscal year 2021/22 will grow by over 4% in real terms and stay above the symbolic level of 2% of GDP. Impacts Growing popular and bipartisan concern with Chinese aggression is a conducive environment for increased defence spending. Low interest rates and a stronger Australian dollar are also supporting sustained levels of defence expenditure. Washington may increase pressure on Australia to conduct freedom of navigation exercises in the South China Sea. Major business groups are concerned that increased criticism of China in national politics will produce yet more punitive backlash.

Proposed Mexican financial legislation sparks concerns

2021 ◽  
Keyword(s):  
Central Bank ◽  
Commercial Banks ◽  
Legal Change ◽  
Content Type ◽  
Investor Confidence ◽  
Potential Impact

Significance The move, however, has proven controversial, generating a backlash over its potential impact on commercial banks and the central bank (Banxico), which sees it as a threat to its autonomy. The proposals come amid an unusual surge in remittances flowing into the country. Impacts Any legal change that is seen as affecting Banxico’s autonomy would damage investor confidence significantly. AMLO may stop legislation changes if they cause a depreciation of the peso. Mexico’s economy looks set to become far more reliant on remittance income than it has been in past years.

Australian central bank holds rate as growth slips

2021 ◽  
Keyword(s):  
Economic Growth ◽  
Central Bank ◽  
Interest Rates ◽  
Labour Markets ◽  
Content Type ◽  
Commercial Lenders ◽  
The Government ◽  
Roll Out ◽  
Growth Forecasts

Significance The RBA has cut its growth forecasts amid rising job losses, weakening demand and increasing signs that the latest COVID-19 lockdowns will continue to slow the economy until the pace of the vaccine roll-out programme can be increased. Impacts Although the RBA is independent, the government will hope it keeps rates low ahead of the elections due next year. Commercial lenders could raise interest rates independently of the RBA if inflation remains high. Wage pressures will re-emerge as labour markets tighten but may be mitigated by the extent of underemployment. Economic growth will be uneven across the country in coming months as pandemic-related restrictions vary by location.

Mexico central bank nomination risks stoking concerns

2021 ◽  
Keyword(s):  
Central Bank ◽  
Content Type

Headline MEXICO: Banxico nomination risks stoking concerns

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