• Country RiskKenya – currency weakness and investment liberalization;
  • Nigeria – a plummeting naira despite new FX restrictions;
  • Serbia – lower interest rates;
  • Venezuela – a double whammy makes the government’s no-devaluation assurances implausible.

BRAZIL:  Last month’s unforeseen interest rate hike has apparently persuaded some analysts to predict a pivot toward more market-oriented official policies, but this will likely turn out to have been a mistake. Any change in the government’s stance is apt to prove temporary.

CHINA:  The economy is still making adequate progress, although its growth has slowed appreciably. While a further deceleration is likely, the government will limit its countermeasures to various forms of “mini-stimulus.” For Beijing’s interaction with the world, it is no longer business as usual.

ETHIOPIA: While the economy’s performance remains strong overall and a tight monetary policy has been keeping inflation down, much remains to be done to develop the landlocked country into a major manufacturing base. Politically the nation remains under tight control and popular protest are strictly limited.

GHANA:  Talks with the IMF on an emergency loan supported by a Fund-supported reform program are making progress, but still have some way to go. While the cedi has stabilized, inflation will continue to rise, making the outlook questionable. Revenues from gold and oil will keep lagging behind official expectations.

HUNGARY:  A crack has appeared in PM Orban’s position, but it does not pose any real threat to Orbanomics or to the push for an “illiberal” regimen after a triumphant trifecta of elections. The unorthodox domestic policies will continue. So will the government’s drift into the Kremlin’s orbit.

ISRAEL:  The economy is not doing badly, although two recent interest rate cuts have not been able to raise inflation to the level desired by the Central Bank. Politically, however, PM Netanyahu, in trying to hold his coalition together for possible early elections, has a tough time preventing Israel from losing international support.

MEXICO:  Near the end of his second year in power, President Pena Nieto is seeking to cement the impressive economic reforms he has put on the books. He should be enjoying political benefits, but instead the people are making it clear that they are hungry for security as much as they appreciate economic progress.

ROMANIA:  Days ahead of the election runoff, PM Ponta still looks like the probable winner. A victory by him would bring more political stability, but also concerns about heavy-handed government. For now, the CB has brought its key interest rate down to yet another all-time low, to inject more vigor into flagging economic growth.

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