Economic policy will be unpredictable after Turks vote

2019 ◽  
Keyword(s):  
Interest Rates ◽  
Ad Hoc ◽  
Public Spending ◽  
Consumer Confidence ◽  
Local Elections ◽  
New Wave ◽  
Content Type ◽  
High Interest ◽  
External Demand ◽  
The Government

Significance The TCMB has responded quickly to a new wave of lira volatility ahead of local elections, forcing banks to borrow at the overnight rate of 25.5% instead of the 24.0% policy rate. Such decisiveness defies President Recep Tayyip Erdogan’s antipathy to high interest rates and is particularly welcome as the government tries to bolster support by reviving economic activity through accelerated public spending and ad hoc interventions. Impacts A lira collapse would trigger renewed crisis and may be avoided, but nominal depreciation is likely and lira volatility almost certain. Inflation may decline, but only to 12-15% from September onwards. Low investor and consumer confidence, weak external demand and high interest rates, debt and unemployment may keep recovery to 0-2% growth. Economic discontent will persist into 2020, inducing Erdogan to continue clamping down despite the tradition for post-election conciliation.

The problems facing agricultural sector in Zanzibar and the prospects of Waqf-Muzar’ah-supply chain model

Humanomics ◽  
2017 ◽  
Vol 33 (2) ◽  
pp. 189-210 ◽  
Author(s):  
Issa Salim Moh’d ◽  
Mustafa Omar Mohammed ◽  
Buerhan Saiti
Keyword(s):  
Supply Chain ◽  
Interest Rates ◽  
Financial Models ◽  
Agricultural Sector ◽  
Chain Model ◽  
Content Type ◽  
High Interest ◽  
Supply Chain Model ◽  
The Government ◽  
Clove Industry

Purpose This paper aims to identify the appropriate model to address the financial challenges in agricultural sector in Zanzibar. Since the middle of 1960, clove production has continually and significantly decreased because of some problems and challenges that include financial ones. The financial intermediaries such as banks, cooperatives and micro-enterprises provide micro-financing to the farmers with high interest rates along with collateral requirements. The numerous programmes, measures and policies adopted by the relevant parties to find out the solutions to the dwindling clove production have failed. Design/methodology/approach The authors will review and examine several existing financial models, identify the issues and challenges of the current financial models and propose an appropriate Islamic financing model. Findings The numerous programmes, measures and policies adopted by the relevant parties to find out the solutions to the dwindling clove production have failed. This study, therefore, proposed a Waqf-Muzara’ah-supply chain model to address the financial challenge. Partnership arrangement is also suggested in the model to mitigate the issues of high interest rates and collateral that constrains the financial ability of the farmers and their agricultural output. Originality/value The contribution of the agricultural sector to the economic development of Zanzibar Islands is considerable. As one of the important agricultural sectors, the clove industry was the economic backbone of the government of Zanzibar. This study is believed to be a pioneering work; hence, it is the first study that investigates empirically the challenges facing the clove industry in Zanzibar.

scholarly journals Macroeconomic impacts of fiscal shocks on the Moroccan economy: a disaggregated SVAR analysis

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Youssef Alami ◽  
Issam El Idrissi ◽  
Ahmed Bousselhami ◽  
Radouane Raouf ◽  
Hassane Boujettou
Keyword(s):  
Economic Growth ◽  
Interest Rates ◽  
Public Spending ◽  
Structural Shocks ◽  
Content Type ◽  
Fiscal Multipliers ◽  
The Government ◽  
The Impact ◽  
Fiscal Shocks

PurposeThe present paper aims to evaluate the structural impact of exogenously induced fiscal shocks on the Moroccan economy. This entails an analysis of the effect on the GDP of COVID-19-induced fiscal shocks manifesting in terms of budgetary revenues and expenditures. A key aspect of this analysis addresses the size of the tax and fiscal multipliers.Design/methodology/approachThe study examines the structural relationship between five variables during the period between Q1 2009 and Q2 2020 using an SVAR approach that allows for a dynamic interaction between ordinary expenditures and revenues on a quarterly basis.FindingsPositive structural shocks on public spending are likely to negatively impact economic growth. Negative economic growth, in turn, will damage price levels and interest rates, mainly over the long term. However, public-revenue-multiplier-associated shocks exceed these price- and interest-rate multiplier-associated shocks. Indeed, a structural shock to ordinary revenues can have a positive but insignificant impact on the GDP stemming from the ensuing decrease in the government budget deficit that proceeds from the increase in government revenues.Originality/valueThis is one of the first studies in the Moroccan context to assess the impact of the current worldwide pandemic on public finances. In addition, this study highlights the importance of boosting economic recovery through public spending.

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

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.

Economic demise set to continue, but farming is a hope

2015 ◽  
Keyword(s):  
Prime Minister ◽  
International Aid ◽  
Local Economy ◽  
Economic Decline ◽  
Content Type ◽  
Trade Relations ◽  
Political Implications ◽  
External Demand ◽  
The Government ◽  
Political Turmoil

Significance The hryvnia crisis, which has seen the currency's value plummet, has deepened. However, as reported by Reuters, the NBU decision was suddenly reversed following heavy criticism from Prime Minister Arseniy Yatsenyuk, who said the move was bad for the economy. Overall, Ukraine's economy continues to be weak and vulnerable to shocks. The local economy had already been struggling for most of 2012-13, owing largely to weak external demand and deteriorating trade relations with Russia. However, the political turmoil that the country found itself in soon after the February 2014 change of power exacerbated these troubles significantly. Impacts Continued economic decline will prompt the government to take new unpopular belt-tightening measures in order to get international aid. Rapid economic reforms increase the risk of mass social discontent with far-reaching political implications. Should key merchandise exports fall further, producers could face an effective loss of their main markets.

Colombia's future rests on justice talks

2015 ◽  
Keyword(s):  
Transitional Justice ◽  
Ad Hoc ◽  
Armed Forces ◽  
Similar Process ◽  
Peace Accord ◽  
Content Type ◽  
Approval Ratings ◽  
Public Approval ◽  
The Government ◽  
Sticking Point

Subject As Colombia's peace talks approach their apparent end date, justice issues are a major sticking point. Significance With barely three months to go until the deadline for a final peace accord, negotiators from the government and the Revolutionary Armed Forces of Colombia (FARC) need to overcome an impasse on the issue of transitional justice. In August, President Juan Manuel Santos appointed an ad hoc team of six lawyers (three selected by each side) to break the deadlock that had persisted for a year. On September 23, a ten-point communique was revealed in Havana as a basis for further negotiations. Impacts Should the deadlock continue into 2016, Santos's public approval ratings are likely to suffer significantly. The sensitive nature of truth and justice negotiations will see opposition figures attempt to use the issue to discredit the government. The successful conclusion of peace talks could pave the way for a similar process with the ELN.

Monetary easing may quicken in Brazil this year

2017 ◽  
Keyword(s):  
Monetary Policy ◽  
Interest Rate ◽  
Interest Rates ◽  
Economic Recession ◽  
Government Debt ◽  
Domestic Demand ◽  
Private Debt ◽  
Content Type ◽  
Positive Effects ◽  
The Government

Significance At its first meeting of 2017, on January 10-11, the COPOM reduced the benchmark Selic interest rate to 13%. The 75-basis-point (bp) rate cut decision, the largest in nearly five years, accelerated the monetary easing cycle that started in October 2016. Economic recession has been relieving inflationary pressures and opening room for more intense cuts in interest rates. Impacts Further reductions of interest rates may contribute to controlling government debt. Private debt renegotiations at lower interest rates may facilitate a recovery in domestic demand and output. Any positive effects of monetary policy on activity may help contain popular dissatisfaction with the government.

Brazil faces stagnation risk in 2017

2017 ◽  
Keyword(s):  
Government Spending ◽  
Pension Reform ◽  
Investment Decisions ◽  
Fiscal Crisis ◽  
New Wave ◽  
Short Term ◽  
Business Investment ◽  
Content Type ◽  
The Government

Subject The risk that the Brazilian economy will stagnate, rather than recover, this year. Significance The recent passage of legislation freezing government spending and the ambitious pension reform currently under discussion in Congress are the flagship policies of the government of President Michel Temer. Both seek to defuse Brazil’s fiscal time bomb in the long term. However, they offer little support to immediate expansion in an economy that not only has been in recession since the second quarter of 2014 but is also locked in a low-growth trap will few apparent short-term escape routes. Impacts Popular dissatisfaction may trigger a new wave of demonstrations, further weakening the government. As long as the fiscal crisis persists, the government’s ability to stimulate the economy will be limited. Political risk will be a crucial factor in business investment decisions in Brazil.

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.

Fiscal adjustment may prove painful in Uruguay

2016 ◽  
Keyword(s):  
Trade Union ◽  
Public Spending ◽  
High Income ◽  
Content Type ◽  
Public Finances ◽  
Fiscal Adjustment ◽  
Economic Climate ◽  
The Government ◽  
First Time ◽  
Economic Outlook

Subject Uruguay's economic outlook. Significance The government has determined a fiscal adjustment, with tax increases for middle- and high-income earners, delays in public spending plans and a reform of military pensions, in a bid to address worsening public finances. It is the first time that the leftist Frente Amplio (FA), in government since 2005, has faced an adverse economic climate. Impacts Austerity in a context of 'stagflation' will generate political and trade union tensions. Rising unemployment will drive a deterioration in real family incomes. Growth will remain paltry this year and next.

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