What Our Analysts Are Reading – 8/10/2018

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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.

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Alex Schober on “The Chilean economy grew by 4.9% in June, and crowned its best semester since 2012

Chile continues to experience broad-based growth from both the mining and non-mining sectors of the economy. That being said, MNCs should expect a deceleration of growth in H2 because of a higher base of comparison from the second half of 2017. Furthermore, the strike at La Escondida mine could decelerate growth faster than expected if the strike is more than one month.

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JosefJosef Jelinek on “​China Fights Back After Yuan Slide

“China’s authorities have intervened to support the yuan, which had been falling towards the 7 to the dollar mark, a level it hasn’t breached in a decade. Currently at a 14 month low against the dollar, the yuan has lost roughly 7% in almost two months. Authorities are clearly spooked. A weaker yuan will help offset tariffs, but they will want to ensure the currency doesn’t fall too far, too fast..

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Mark McNamee

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Ryan Connelly on “U.S. finalizes next China tariff list targeting $16 billion in imports”

“As expected, the US is putting in place an additional $16bn in tariffs on Chinese imports on August 23rd. This complements the previous $34bn in tariffs already put in place, and brings the total up to $50bn. The next $200bn in tariffs are still in the pipeline, and as with the previous rounds, the USTR will hold a public hearing in September to hear input from MNCs impacted by these tariffs.

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Dalia Naguib on “Iran hit by new round of US economic sanctions

“The first round of US sanctions on Iran came into effect on Tuesday, placing restrictions on Iran’s strategic sectors and on US dollar-Iranian rial transactions. While not all sectors are being sanctioned, non-US firms with Iranian operations will experience difficulty shipping their goods and obtaining financing because of sanctions on Iran’s shipping and financial sectors.

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Matthew KindingerMatthew Kindinger on “Nigerian Central Bank ‘in the Mood for Tightening,’ Nnanna Says

“Stubborn inflation has prompted the Central Bank of Nigeria (CBN) to shift its tone in recent months toward a potential tightening of monetary policy. An increase in the CBN’s main interest rate—already at record high of 14%—would likely cause investment and B2B demand growth to cool. MNCs should be also be prepared to support local partners if accessing affordable finance becomes more difficult.”

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