• Canada – a telling foreign trade deficit;
  • Kuwait – yet another Cabinet reshuffle;
  • Tunisia – hope that the IMF will be satisfied.

BRAZIL: The real has steadied in the FX markets thanks to promises that the CB will extend its intervention program and in expectation of higher interest rates, even though the economy has clearly weakened. The political outlook remains opaque, however, and the EU has just launched a potentially troublesome trade case against Brazil.

CENTRAL AFRICAN REPUBLIC: Elections may be held this year, but there is no guarantee that they will take the CAR back from the brink of religious warfare on a scale comparable to Rwanda’s 1994 genocide. Outside forces that have become involved, from France to the UN and the OAU, have been unable to contain flare-ups of the violence.

CHINA: Concerns about the magnitude of the country’s local-government debt are overdone, but the speed of increase is something to worry about. There is fear, in particular, that any harsh crackdown will throw sands into the gears of the already slowing economy. The regime’s response is to make it easier for the debtors to roll over what they owe.

INDIA:  The Reserve Bank kept interest rates steady last month, but it still has its finger on the trigger in the event the Fed steps up its QE-3 tapering with greater than anticipated effects on the rupee. Inflation is a problem. So is the lack of interest global investors have in Indian debt. Bad bank loans play a role in this. So do political developments.

ITALY:  The economy may have reached a turning point, but unemployment will stay painfully high and will, on and off, help to keep the “pitchfork protests” going. There is nothing in the 2014 budget to change this. More significant is the rise of a new generation to the top of Italy’s political pyramid.

LIBYA:  There has been some rebound in the flow of oil from a 10-month slide, but conditions remain far from normal and liftings & sales are still held hostage to political unrest. This is raising havoc with the government’s financial situation, to the point of hindering imports of food. Improvements in the near future are unlikely.

MALAYSIA:  Investors can take encouragement from the progress Prime Minister Najib Razak is making with his campaign to shift the economy toward market-based prices for commodities and energy, but the measures hit particularly the middle class hard and there is some risk that they may lead to social unrest.

PAKISTAN:  Investors are putting money into the country, its manifold problems notwithstanding. Among the main attractions are a more stable political situation and an improved energy outlook. Relations with the US remain precarious, however, and so are those with the IMF.

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