• Risk iStock_000016809464SmallChile – the Central Bank has resumed interest rate cuts;
  • Egypt – a preemptive rate hike to “anchor inflation expectations;
  • Russia – consequences of the tragic passenger plane shoot-down;
  • Turkey – slowing inflation, lower interest rates;
  • Zambia – a rebound by the kwacha.

INDIA: The new government’s first budget disappointed many who had anticipated a more aggressive turning of the country’s economic steering wheel. It shouldn’t have come as a disillusionment. The administration had precious little wiggle room and it did use the opportunity to spell out where it wants to take the nation.

INDONESIA:  Indications are that Joko Widodo has won the elections. Since both he and his opponent have been claiming that there was cheating, though, the matter will wind up in the hands of three institutions with bruised reputations, the Elections Commission, the constitutional court, and the presidency of the outgoing Yudhoyono.

PHILIPPINES:  An impeachment complaint filed against President Aquino will be overcome by him with relative ease, but the allegations of graft in the administration are overshadowing real accomplishments. The economy should pick up its pace in the second semester, while inflation is tending higher.

PORTUGAL:  The troubles at Espirito Santo mar the exit the country is attempting from its bailout program. The odds are, though, that taxpayers will not have to rescue the bank. More of a longer-term problem are the hurdles the constitutional court has thrown into the government’s fiscal path.

RUSSIA: The latest round of sanctions are apt to have more of an impact than one might assume at first blush. But they will not get President Putin to change his plans concerning Ukraine. The economy appeared to just barely avoid slipping into a formal recession in the second quarter, but effectively it is in one, with rising inflation

SERBIA:  The three-month-old government is under increasing public and political pressure. With the country’s financial problems heightened by the worst floods in a century, the economy is facing its third recession in five years and the unemployment rate is almost 24%.

SLOVENIA:  Indications are that the incoming government will be business-friendly and will not change policies a great deal. Since it will be a coalition administration comprised of Leftist parties, however, it will most likely be happy to just muddle through, without addressing the true, underlying problems facing the economy.

SPAIN:  While the tax cuts announced by the government have met with criticism from many quarters, they do make sense for an economy in the midst of an upturn… His coronation just as the economy emerges from crisis gives King Felipe VI an unusual opportunity to emulate his father as a critical guiding light for the country.

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