Russian policy toolkit mixes rate rises and price caps

2021 ◽  
Keyword(s):  
Central Bank ◽  
Interest Rates ◽  
Oil Prices ◽  
Target Level ◽  
Content Type ◽  
Price Controls ◽  
Interest Income ◽  
Personal Savings ◽  
The Government

Significance This is high enough to worry the Central Bank of Russia (CBR): inflation has hovered around 4%, the bank's target level, for the last four years. The CBR has responded with monetary tightening, and the government with price controls on food and some exported commodities. Impacts Rising domestic interest rates and higher global oil prices will support the ruble. Elevated inflationary expectations will discourage long-term investment and personal savings. Higher interest rates will improve banks' net interest income and support banking profitability in 2021.

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.

Mexican fiscal consolidation steady despite oil price

2015 ◽  
Keyword(s):  
Monetary Policy ◽  
Central Bank ◽  
Oil Prices ◽  
Oil Price ◽  
Fiscal Consolidation ◽  
Significant Drop ◽  
Content Type ◽  
The Government

Subject The outlook for fiscal consolidation. Significance The significant drop in oil prices should not derail the fiscal consolidation trajectory mapped by President Enrique Pena Nieto's administration, which envisages that the debt/GDP ratio should stabilise by 2017. The fiscal hole opened by reduced oil prices has been compensated with greater taxation income and one-off revenues. Impacts Defying expectations, the oil price plunge did not push the government into an overtly contractionary fiscal correction. An arguably much-needed simplification of the cumbersome taxation regime will not take place due to the government's pledge not to alter it. Loose monetary policy from the autonomous central bank has worked in tandem with the government's fiscal stance.

Pandemic will take heavy economic toll in Colombia

2020 ◽  
Keyword(s):  
Central Bank ◽  
Interest Rates ◽  
Economic Impacts ◽  
Fiscal Deficit ◽  
Slow Recovery ◽  
Content Type ◽  
Fiscal Incentives ◽  
Second Year ◽  
The Government

Significance This has triggered a series of economic setbacks. The economy showed modest growth in the first quarter of 2020 before plummeting 15.7% in the second, year-on-year. Various industries and sectors have all but ground to a halt. Unemployment reached 20.3% in the second quarter. Impacts Fiscal incentives implemented by the government to mitigate the pandemic’s economic impacts will widen Colombia’s fiscal deficit. Interest rates will probably drop further as the Central Bank tries to add liquidity into the economy. Fiscal pressures imply a slow recovery for the economy in coming years, rolling back two decades of social improvements.

New Ukrainian cabinet raises fears of slowing reform

2020 ◽  
Keyword(s):  
Central Bank ◽  
Interest Rates ◽  
Land Reform ◽  
Prime Minister ◽  
Content Type ◽  
The People ◽  
Obvious Reason ◽  
The Government

Subject Ukraine's reshuffle. Significance A new cabinet was unveiled on March 4 after the resignation of Prime Minister Olexiy Honcharuk. The reshuffle was carried out in a hurry with no obvious reason for such haste. Honcharuk's team is being blamed for some problems that long pre-date its five-month tenure. President Volodymyr Zelensky may be seeking to shore up his formerly sky-high popularity ratings, which fell below 50% in early February. Impacts The dismissal of Prosecutor General Ruslan Ryaboshabka will add to concerns about the commitment to fight corruption. The government reshuffle has more implications for the economy than for the conflict in eastern Ukraine. Zelensky has tried to get a land reform passed; he may be less keen if it is liable to reduce his popularity. The reshuffle may be a sacrifice made to maintain disparate loyalties in Zelensky's Servant of the People party. A further fall in inflation would let the central bank keep cutting interest rates.

Ukraine hopes for lockdown-light recovery

2021 ◽  
Keyword(s):  
Central Bank ◽  
Interest Rates ◽  
Infection Rates ◽  
Content Type ◽  
The Government ◽  
First Time

Significance Since the initial lockdown of March-May 2020, the government has prioritised economic reopening. This has had some success: last year's GDP contraction was less severe than many feared, but COVID-19 infection rates have not spiralled out of control. Impacts If inflation accelerates rapidly, the central bank is likely to raise interest rates for the first time under this presidency. Further delays to IMF lending could force the government to negotiate a new agreement, but reform conditionality will still be key. Despite the latest evidence that the Russian Sputnik V vaccine is effective, Kyiv is likely to reject it.

Oil prices will squeeze Russian budget spending

2016 ◽  
Keyword(s):  
Interest Rates ◽  
Capital Investment ◽  
Oil Prices ◽  
Content Type ◽  
Access To Credit ◽  
Eurasian Economic Union ◽  
The Media ◽  
The Government ◽  
Fixed Capital Investment ◽  
Vladimir Putin

Subject The government's scramble to revise its budget. Significance Prime Minister Dmitry Medvedev has ordered ministries to cut spending further, the government's website announced on January 15. The reductions will be "significantly more drastic" than in previous years, he said. The media reported earlier that the government was planning to cut 10% from the budget expenditure that parliament approved in November and President Vladimir Putin signed into law in December. Impacts Continuing low oil prices will be the main obstacle to a balanced budgetary policy beyond 2016. Reduced fixed capital investment and limited access to credit due to high interest rates will hamper a return to growth. Domestic economic problems will continue to depress trade with other former Soviet states, especially those in the Eurasian Economic Union.

Herrera will maintain Mexico’s economic policy

2019 ◽  
Keyword(s):  
Monetary Policy ◽  
Economic Policy ◽  
Interest Rates ◽  
Content Type ◽  
High Profile ◽  
The Government ◽  
Undue Pressure

Significance Urzua’s abrupt departure is the most high-profile that AMLO has experienced in his seven months in office. Impacts The peso will be volatile for some time but a tight monetary policy should avert any long-term depreciation due to Urzua’s resignation. His resignation deprives the government of an individual trusted by the markets to contain the government’s most statist members. Herrera is known to favour lower interest rates, but there is no expectation that he will put undue pressure on the Bank of Mexico.

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

Long-term viability of Mexico's Pemex is uncertain

2015 ◽  
Keyword(s):  
Public Debt ◽  
Labour Force ◽  
Oil Prices ◽  
Financial Viability ◽  
Content Type ◽  
Oil Reserves ◽  
Percentage Points ◽  
Future Challenges ◽  
The Government

Significance The recent plunge in oil prices has set back the opening of the energy sector enacted by the government of President Enrique Pena Nieto, making investment in the industry less attractive. The blow has been particularly hard for Pemex, compromising even further its financial viability, given its huge capital needs and rigid labour force. Impacts Pemex's future challenges will be formidable given its finance- and workforce-related weaknesses. Still-to-be-announced end-2014 figures for proven oil reserves could fall below 13 billion barrels, nearly half the 2000 peak. Government absorption of unfunded Pemex pension commitments could increase public debt by some 10 percentage points of GDP.

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