- Italy – lowered growth expectations, bigger fiscal deficit;
- Macedonia – fragile external accounts;
- Slovakia – the Russian/Ukrainian conflict is damaging business confidence;
- Vietnam – foreign investors have been rattled by the anti-Chinese riots.
ARGENTINA: The regime’s vocal protestations against any effort to force it to pay holdout investors in its bonds may help Pres. Cristina Kirchner in next year’s elections. But the economy is now going into an accelerating tailspin and this is bound to cost the President and her administration politically.
AZERBAIJAN: The regime is in the midst of a new assault on human rights, in this country whose booming economy is rooted in a corrupt system that generates enormous wealth for a small elite. Its oil and gas resources guarantee the nation a comfortable external position.
CHINA: As the slowdown persists, the pressures are growing on the government in Beijing to introduce more stimulatory measures. The authorities will stick with their piecemeal approach, convinced that it suffices to keep the pace of growth close to the official goal. The latest steps include easier credit and relaxed mortgage rules.
HONG KONG: The longer the stand-off between pro-democracy protesters and the Chinese government lasts, the more difficult it could become to resolve and the greater will be the risk of a violent end. Comparisons with earlier conflicts tend to overlook that there is a significant difference this time. There is also bound to be damage to the economy.
LITHUANIA: Western sanctions imposed on Russia are hurting this country, quite aside from concerns that it, too, may become a target of the Kremlin’s expansionism. At that, President Grybauskaite recently won re-election on a strongly anti-Russian platform.
RUSSIA: The Western sanctions, predictably, are hitting Russia harder than Moscow policy makers were initially willing to admit. The ruble has been taking a beating amid speculation that the CB is getting ready to impose capital controls. Russia, in turn, is lashing out against foreign companies operating on its soil.
TAIWAN: The Central Bank has been tightening its monetary policy as inflation becomes somewhat more of a worry. This follows a change at the helm of the Economy Ministry. In a remarkable shift in the political arena, the opposition is changing its stance on independence from China. It is making headway with its drive against nuclear power.
VENEZUELA: The bolivar and bonds have been hit by a sudden surge in speculation that the country will have to default on its debt. This is not a near-term prospect, but the odds are growing that it will happen down the road. The incredibly mismanaged economy is in dire shape. Opposition to Maduro’s regime is growing among labor unions.
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