Peru&#39;s recovery will be slow after double-digit drop

10.1108/oxan-db197102 ◽

2015 ◽

Keyword(s):

Civil Society ◽

Public Sector ◽

Local Governments ◽

New Normal ◽

Content Type ◽

Social Instability ◽

Economic Slowdown ◽

The Impact ◽

Double Digit ◽

China’S Economy

Significance Leaders describe this as a 'new normal', backtracking on their warnings during the era of double-digit growth that failure to keep growth above 8.0% would lead to social instability. However, unrest among the 770 million strong workforce is rising rapidly, much of it directly related to the economic slowdown. Businesses are closing and employers failing to pay wages and benefits. Local authorities are responding to this unrest with greater force. Impacts Tensions between workers and the authorities will remain high as local governments and police take a tougher stance with strikers. The current crackdown on civil society will reduce NGOs' ability to intercede in and successfully resolve labour conflicts. The impact of the economic slowdown will broaden to include workers in the mining and energy sectors. Low-paid public sector workers will stage strikes and protests as cash-strapped local governments cut employee pension and other benefits.

ECB faces multiple challenges in withdrawing stimulus

10.1108/oxan-db224509 ◽

2017 ◽

Keyword(s):

United States ◽

Interest Rate ◽

Futures Markets ◽

The United States ◽

Quantitative Easing ◽

Inflation Target ◽

Content Type ◽

Financial Conditions ◽

Multiple Challenges ◽

Subject ECB policy deliberations. Significance At its latest interest rate-setting meeting on September 7, the ECB admitted that the euro's dramatic double-digit appreciation against the dollar this year has tightened financial conditions, making it more difficult for the central bank to meet its 2% inflation target. Yet despite the euro’s disinflationary effects, the ECB intends to announce its plans to begin scaling back its quantitative easing (QE) programme at its next policy meeting on October 26. Impacts Futures markets see a probability of more than 50% that the United States will increase rates in December, up from 20% in early September. Euro-area economic confidence is at the highest since July 2007, and positive in every country, putting pressure on the ECB to unwind. Market concerns over whether OPEC/non-OPEC oil cuts will be extended could rise ahead of the next OPEC meeting on November 30.

German populist party AfD may have reached its peak

10.1108/oxan-db210291 ◽

2016 ◽

Keyword(s):

Radical Change ◽

Right Wing ◽

Traffic Light ◽

Content Type ◽

Eastern State ◽

Feasible Option ◽

Election Results ◽

The Moment ◽

The Right ◽

Significance The recent state elections demonstrate that German voting patterns are becoming increasingly flexible. The right-wing populist Alternative fuer Deutschland (AfD) achieved double-digit results in all three elections and became the second-strongest party in the eastern state of Saxony-Anhalt. The election results also increase the intra-party pressure on Merkel and highlight the tensions within the coalition, but at the moment, neither a radical change in Merkel's refugee policies nor early federal elections seem likely. Impacts In Baden-Wuerttemberg, the Greens will form a coalition government with the weakened CDU. In Rhineland-Palatinate, a 'traffic light coalition' (SPD, Liberal Democrats and Greens) is the most likely outcome. In Saxony-Anhalt, a 'Kenya coalition' (CDU, SPD and Greens) is the only politically feasible option. In two states a CDU-SPD coalition would not have a sufficient majority to govern, which is a first in the Federal Republic's history.

Cutbacks increase risk of elite infighting in Qatar

10.1108/oxan-db208198 ◽

2016 ◽

Keyword(s):

Foreign Policy ◽

Saudi Arabia ◽

Domestic Politics ◽

Political Stability ◽

Royal Family ◽

World Cup ◽

Fifa World Cup ◽

Content Type ◽

Increase Risk ◽

Subject Qatar domestic politics. Significance Emir Tamim bin Hamad Al Thani carried out a cabinet reshuffle on January 27. The reshuffle saw the promotion of a number of new ministers and a reduction in the overall number of ministries, reflecting efforts by the emir to clear out the 'old guard', and cut costs as the country enters a period of fiscal tightening after years of double-digit growth. Impacts Some of the pledged 200 billion dollars in spending ahead of the 2022 FIFA World Cup may also be at risk. Financial stress will temper Qatar's 'appetite' for foreign policy autonomy and reinforce its realignment with Saudi Arabia. Factional infighting within the royal family is likely to be a greater threat to political stability than social dissent.

Foreign banks’ faith in Mexico will endure

10.1108/oxan-db219829 ◽

2017 ◽

Keyword(s):

Latin America ◽

Commercial Bank ◽

Banking Sector ◽

Foreign Bank ◽

Foreign Banks ◽

Content Type ◽

International Banks ◽

Loan Growth ◽

Subject Mexican banking. Significance On March 10, Japan's Mizuho launched a commercial bank in Mexico, becoming the latest foreign bank to begin operations there. Mexico's banking sector has been one of the fastest-growing and most attractive in Latin America in recent years, with several new players entering and double-digit loan growth. Impacts Major international banks’ continued interest in Mexico shows confidence in an economy and a government under pressure. Banks that are willing to lend heavily will be important for the struggling Mexican economy. Mexican FDI will benefit from investments by foreign banks despite a predicted fall in FDI overall.

Ecuador banking sector is set for a comeback

10.1108/oxan-db229903 ◽

2018 ◽

Keyword(s):

Private Sector ◽

Central Bank ◽

Banking Sector ◽

Bank Lending ◽

Foreign Banks ◽

Economic Recovery ◽

Content Type ◽

Loan Growth ◽

Subject Banking sector prospects. Significance Private sector banks in Ecuador enjoyed strong double-digit loan growth last year -- a reflection of the troubled economy’s gradual emergence from recession. That economic recovery, and the pragmatic willingness of President Lenin Moreno to work with the private sector, is generating optimism regarding the prospects of the country’s banking sector. Impacts Strong bank lending is key for economic recovery, allowing firms to increase investments and consumers to spend more. Taking the E-money system from the central bank shows Moreno’s pragmatism vis-a-vis the private sector. The planned sale of state-owned lender Banco del Pacifico could attract the interest of foreign banks.

Prospects for Argentina in 2021

10.1108/oxan-db257353 ◽

2020 ◽

Keyword(s):

Economic Policy ◽

Content Type ◽

Double Digit ◽

The Imf

Significance Doubts over the extent of recovery from a double-digit contraction this year are complicating efforts to renegotiate debt with the IMF and present a plausible economic policy package for 2021.

Ghana's budget proposals likely to prove unfeasible

10.1108/oxan-db218437 ◽

2017 ◽

Keyword(s):

Government Spending ◽

Foreign Debt ◽

Fiscal Deficit ◽

Content Type ◽

Small Impact ◽

The Government ◽

Oil Revenues ◽

Expected Increase ◽

Significance The government plans to increase government spending to 58.1 billion cedis (12.5 billion dollars), up 13.7% from 2016, while reducing the fiscal deficit to 6.5% of GDP from 8.7% last year. The government has assured supporters it will keep campaign promises to cut taxes and increase infrastructure spending, despite the larger-than-expected fiscal hole in government accounts. Impacts Increased oil revenues will have a relatively small impact on government finances, despite the almost 40% expected increase in output. The government will likely renege on several election promises after admitting that it cannot deliver double-digit growth this year. Plans to pay down foreign debt this year may be unachievable given overly ambitious revenue targets.

Brazil, Mexico banking results show diverging trends

10.1108/oxan-db213378 ◽

2016 ◽

Keyword(s):

Positive Impact ◽

Bank Credit ◽

Economic Recovery ◽

Sharp Drop ◽

Content Type ◽

Loan Demand ◽

Severe Recession ◽

Loan Growth ◽

Credit Boom ◽

Subject The banking outlook. Significance Brazil's severe recession has brought a halt to the bank credit boom while banks in Mexico are enjoying strong loan demand and double-digit lending growth. Impacts The sharp drop in lending in Brazil will slow economic recovery. Brazilian banks' profitability will also come under pressure from rising bad loans. Sustained high loan growth in Mexico should eventually have a positive impact on the modest pace of growth.

Nigerian central bank faces short-term debt hazards

10.1108/oxan-db244823 ◽

2019 ◽

Keyword(s):

Exchange Rate ◽

Central Bank ◽

Interest Rates ◽

Foreign Currency ◽

Capital Controls ◽

Financial Inclusion ◽

Medium Term ◽

Short Term ◽

Content Type ◽

Significance Emefiele has vowed that the CBN will significantly increase financial inclusion, recapitalise banks and help the economy achieve double-digit growth over his second term. However, the significant amount of CBN bills in circulation, a key but costly component of the Bank’s recent exchange rate strategy, poses serious medium-term risks. Impacts The CBN's continued focus on exchange rate stability leaves limited space for reducing interest rates over the short term. Effective foreign currency yields of over 10% are appealing for portfolio investors, but a sudden naira slide would prompt major losses. Significant divestment by foreign portfolio investors may make the CBN resort to temporary capital controls to limit damage to the naira.