- Costa Rica – the de facto floating of the colon has been made official;
- Ecuador – struggling with low oil prices;
- Greece – the European Central Bank no longer accepts Greek sovereign debt as collateral for its liquidity operations.
BRAZIL: Brazil watchers keep lowering their economic growth expectations for the country. Encouraging indicators are few and far between and the expectations are probably still pegged too high. Taxes are rising, cheap loans from BNDES are becoming scarcer, and the fallout from the corruption mess at Petrobras is hurting as well.
CANADA: The risks linked to the collapse of oil prices are considerable and amplified by a housing bubble. Canada’s oil industry is digging in for the long haul and does not need Keystone XL to win the US crude supply battle. Still, the Tories are likely to have rough sledding in the upcoming general elections.
CHINA: Early statistics for January underscored the CB’s decision to loosen the monetary screws. Still, no cave-in is anticipated and the authorities will continue to be cautious in their efforts to stimulate activity. Interesting is that the shift in emphasis from exports to domestic consumption persists and that the CB is upholding the value of the yuan rather than depressing it artificially.
GREECE: Having stirred up the markets during its first week in power, the country’s new leadership is taking on a much more moderate tone. While the risk of a Greek exit from the common currency has increased, the odds still favor a compromise with the creditors.
RUSSIA: In one of the most abrupt U-turns in recent history, the CB has shifted to loosening monetary conditions. This is a political gesture, however, that will have little effect on the economy or the ruble. President Putin’s political position is not as strong as it may appear from the outside.
SINGAPORE: MAS has eased monetary policy in response to the growing global uncertainties. It plans to stick to a modest and gradual appreciation of the local dollar against a basket of currencies, but versus the US dollar the SGD will depreciate some more.
UNITED KINGDOM: The upcoming elections are likely to leave Britain once again in the hands of an oddly formed political alliance. The unpredictability does not so much pertain to economic policies, though, but to the UK’s place in the European Union. This is the key invariable that business needs to worry about.
UNITED STATES: The budget President Obama has presented is a political rather than economic document. Nobody expects it to be legislated in anything remotely resembling its current form. But in kicking off a series of battles over federal spending it offers a platform of which at least pieces may prove useful as a basis for debate. There are at least six areas with possibilities for compromise.
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