• Colombia – trying hard, and in vain, to hold the peso down;
  • Israel – no more peace talks for the foreseeable future;
  • Zimbabwe – considering to bring back the Zimbabwe dollar.

AUSTRALIA:  The Reserve Bank is not likely to raise interest rates anytime soon, and this is catching AUD-bulls wrong-footed. We stick to our contention that the Aussie dollar is likely to fall over the coming year. Exporters are benefitting from the lower exchange rate, but Australian car manufacturing still faces extinction. A free-trade pact with China may prove elusive.

BARBADOS:  The economy has not yet recovered from the 2008 global crisis and seriously growing imbalances now require urgent action on the part of the authorities. They have their priorities in the right place. Whether they have the will to stay the course remains to be seen.

IRAN:  Despite the easing of international sanctions, the economy is in dire shape and there is little near-term relief in sight. Companies and banks abroad, afraid to run afoul of US regulations, are walking on eggshells in their approach. Tehran is battening the hatches for more difficult times. But the nuclear “deal” will not accomplish what it set out to do.

JAPAN: Real GDP is sure to shrink in the current quarter, now that the sales tax hike has gone into effect. The question for the economy – and for Prime Minister Abe’s political fortunes – is how steep the downturn will be and how long it will last. There are offsets, but the latest news from the economy have not been overly encouraging.

MOZAMBIQUE: The country is headed for elections this year, but it does not appear as though these will bring a major change in the political situation, persistent, low-level violence between Frelimo and Renamo notwithstanding.  The economy is one of the most dynamic in sub-Saharan Africa, driven by coal and natural gas and related investment.

PORTUGAL: A highly successful bond issue has paved the way to a clean exit from the financial bailout program next month. Lisbon still plans some austerity measures, but it is likely to become, after Ireland, the second Eurozone member to escape from its three-year rescue scheme.

SAUDI ARABIA:  The economy has been growing quite rapidly in recent months, but the House of Saud is more concerned with security these days. It has tightened curbs on dissent and appointed a new security chief.  King Abdullah has also named a second Crown Prince to make succession more predictable.

SPAIN:  Yields on sovereign debt have fallen to remarkably low levels and this has set a virtuous cycle in motion. The authorities cannot count on it to be sustained, but with help from the ECB they could make it last.  Political tensions have increased with parliament’s rejection of the Catalan request for a referendum on independence.

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