- Czech Republic – still a tug of war over the exchange rate cap;
- Hong Kong – a budget with a number of sweeteners;
- Singapore – the first increase in the top income tax rate in decades;
- Ukraine – a ban on commercial FX trading.
AZERBAIJAN: The CB abandoned efforts to keep the manat stable in the face of plunging oil prices and slowing growth. It announced a massive devaluation after it had just signaled plans for a different course. The move, meant to strengthen “international competitiveness,” will have a number of adverse consequences.
BANGLADESH: The confrontation between the “battling Begums” has become so fierce that it is raising concerns about the future of this country as a democracy. Islamist jihadi forces are taking advantage of the destabilization. At the very least, the political crisis is raising doubts about Bangladesh’s ability to sustain recent economic gains.
GREECE: Doubts about the compromise deal with the troika of bailout lenders persist as only the immediate threat to the country’s Eurozone membership has been removed. The critical point will come four months from now, when the current arrangements expire. Many more compromises, on both sides, will be needed.
HUNGARY: The ruling Right-wing alliance of Prime Minister Orban has lost its two-thirds majority in parliament. This underscores a growing sense of disillusionment on the part of Hungarian voters. The government is now planning to lighten the financial burdens on banks while the CB is moving.
ITALY: The country may be the Eurozone member that benefits most from the ECB’s embrace of “quantitative easing,” largely because this program has led to a marked weakening of the euro. Rome also welcomes a more relaxed stance by Brussels toward the fiscal goals of euro nations.
JAPAN: The economy has been struggling out of recession, but it remains doubtful that the Central Bank’s super-loose monetary policy will do much lasting good. Much more important in this respect have been indications that the authorities are succeeding in persuading companies to be more generous with their pay hikes.
POLAND: The government is still trying to find a way to help households and small companies troubled by CHF-denominated borrowings. It is also negotiating with unions fighting efforts to introduce austerity measures in the loss-making coal mines. There are positive signals, though, suggesting that consumer demand will strengthen.
TUNISIA: The new government offers a chance for the survival of democracy in this last of the Arab Spring nations to still have one, but it is facing considerable odds. It will have to implement a tough economic program to retain the goodwill of investors and aid donors. It also has to deal with serious security problems.
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