• Country Risk 200Mauritius – Labour lost a bid to strengthen presidential powers;
  • Norway – repercussions from the oil price collapse;
  • Portugal – economic prospects have improved a great deal;
  • Russia – struggling with falling oil prices and a plunging ruble;
  • Uruguay – Tabare Vasquez is the new president.

CYPRUS:  Accounting changes upgrading GDP have made it easier to leave the international bailout program, although major weaknesses persist and external shocks remain a threat. Lenders are concerned about a newly developed lag in the implementation of the adjustment program.

GREECE:  The country is back in trouble less than six months after it appeared to be past the worst and ready to exit its bailout program.  The reason is almost entirely political and the outcome of the latest crisis will depend on that of the gamble Prime Minister Samaras has taken by calling for a snap presidential vote in parliament.

INDONESIA:  Pres. Widodo has moved swiftly to cut fuel subsidies and initiate other investor-friendly moves, while the CB has raised interest rates. Widodo’s course will not be an easy one, though. As a first indication, his dealing with fuel price protests will help to signal how effective he will be in governing.

LUXEMBOURG:   The Grand Duchy’s fiscal and external positions remain sound and the large financial sector has proven its resilience.   While the country’s low-tax practices are now under attack, the economy is being reformed in a way that will likely be successful.

NIGERIA:  The authorities have been battling in vain to defend the naira against the intense downward pressures from the oil price plunge. The country was ill prepared for this development.  A further devaluation of the currency will prove inevitable, as will additional hikes in interest rates. Economic growth will suffer.

SAUDI ARABIA:  What, exactly, is behind Saudi oil policies in these days of a global supply glut and falling prices is not easy to fathom, but it would seem that Riyadh has more than one reason for refusing to cut production as the weaker members of OPEC would want it to do.  Some are strictly economic, some are also political.

TURKEY:  The Central Bank will probably soon cut interest rates, given the economy’s marked slowdown as well as low oil prices that should moderate inflation and strengthen the external accounts.  This does not change the fact that the main risk in the outlook is a sharp decrease in capital inflows.

UKRAINE:  The new government will have its hands full trying to steer the country away from the financial crisis toward, which it is heading.  It will have to move quickly to produce a 2015 budget and come to terms with the IMF.  The handicaps it has to overcome are enormous, though, with Russia holding strong cards.

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