What Our Analysts Are Reading – 9/29/2017

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Each week Frontier Strategy Group’s global team shares their view on key media stories, and what the implications are for businesses that operate in emerging markets. For more information about how to contact our analysts, send us an email.

Antonio MartinezAntonio Martinez on “With Latest Nafta Proposals, U.S. Takes on Bigger Targets, Critics”

“The most contentious rounds of negotiations for NAFTA still await, and multinationals will need to consistently monitor both the potential for a breakdown in negotiations, or even a reduction in U.S. demands for more protectionist measures over the coming months.”

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Matthew KindingerMatthew Kindinger on “MPC retains Nigeria’s lending rate at 14%”

“The Central Bank of Nigeria yesterday decided to leave the benchmark lending rate unchanged at 14%, citing evidence that the government’s fiscal stimulus is starting to positively impact growth. Going forward, the Central Bank will resist lowering the policy rate if the high inflation rate persists. Consequently, borrowing costs for MNCs and their local partners in Nigeria will remain high.”

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Athanasia Kokkinogeni on “German elections: Carmakers and coal companies predict problems with potential Green party coalition”

“In line with FSG projections, Chancellor Angela Merkel won the elections, and the far-right AfD managed to make gains and enter the parliament. Merkel is likely to lead the Jamaica coalition with the Liberals and the Greens. The Liberals are likely to push for less domestic and external spending, and the Greens will demand more environmentally friendly policies impacting B2G and B2B firms’ plans.”

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Alex Shober on “Argentina economic activity expanded 4.9% in July, according to INDEC”

“The economic activity index of Argentina (EMAE) showed an expansion of 4.9% YOY in July. From the beginning of 2017, EMAE has expanded 2.1% YOY. The main sectors that expanded were construction (15.7%) and financial services (6.9%). Meanwhile, mining and utilities contracted (-4.6% and -1.9%, respectively). MNCs should continue to approach these fast-growing sectors to capture market demand.”

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Mark McNameeMark McNamee on “Russian banking system to strengthen after clean-up: deputy finance minister”

“More banks will need to be saved by the central bank going forward as this process has only just begun. Fortunately, Russia has the reserves to support these bail outs and there should not be a significant impact on growth or lending levels, which will pick up more substantially in 2018 as interest rates decline further and faster.”

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Ashu Agarwal on “Indonesia to trace and tax assets hidden during amnesty”

“The Indonesian government, faced with one of the lowest tax collection ratios in Southeast Asia, introduced a tax amnesty program in 2015. As a follow-up, it introduced new regulations to penalize individuals who failed to declare their assets during the tax amnesty. Despite these reforms, growing tax revenues significantly will be a challenge due to structural issues in the tax collection system.”

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