- Russia – evidence of the damage the sanctions are doing;
- Sweden – a move to snap elections only three months after the last balloting;
- Venezuela – budget cuts and other signs that a devaluation is coming.
AUSTRALIA: The Australian dollar remains under pressure from the sharp decline in commodity prices and the souring economy. It is likely to lose more ground in the FX markets, especially if the Reserve Bank decides to cut interest rates. All this underscores the timeliness of the trade deal Canberra has just signed with China.
ISRAEL: Prime Minister Netanyahu’s call for early elections creates political uncertainties that will hurt the already struggling economy. A general strike could become a further problem while Europe is adding to its gestures of disapproval of Israeli policies. Offshore gas drilling has ground to a halt due to an increasingly hostile regulatory environment.
JAPAN: The outcome of the snap elections Prime Minister Abe has called seems to be more easily predictable than what will follow on the economic front. With the economy in a new technical recession, companies appear to be doing quite well, but consumer confidence will have to improve to make any rebound sustainable.
KENYA: The economic outlook would be good, were it not for the troubling influence of terrorism inflicted by al-Shabaab. A lesser problem is that insatiable demands for more tax revenues by county governments are creating an environment that investors find increasingly unpredictable.
MOLDOVA: After Ukraine, Moldova is the next-most vulnerable country facing Putin’s expansionist desires. Last weekend’s elections gave the edge to pro-European parties, but the nation is split and Moscow is undoubtedly tempted to take advantage. An economic slowdown this year should give way to a rebound in 2015.
ROMANIA: President-elect Johannis owes his victory to a number of factors. The voters apparently trusted his assurances of a continuation of the anti-corruption campaign more than those of his opponent. Since the latter is still PM at the helm of a government dominated by his party, a difficult cohabitation will have to be worked out.
RUSSIA: The economy is already in worse shape than officials care to admit and there is little doubt that conditions will get worse. For now, Pres. Putin is not suffering serious political consequences, but in the longer run the risks will grow that Russians begin to hold his regime responsible.
VIETNAM: Fears that the anti-Chinese riots earlier this year would permanently chill foreign investment have been overdone, but there are a number of other reasons why FDI is not as strong as it could be. The outlook is for gradually improving growth and contained inflation. The external accounts will remain easily manageable.
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