What Our Analysts Are Reading – 12/14/2018

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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.

Ramiro Sugranes on “Goodyear permanently ceases Venezuela operations

“Goodyear is the latest multinational to announce a permanent exit from Venezuela as the severe economic crisis evolves. MNCs that planned to weather out the downturn to protect market share have in large part reconsidered this decision noting impossible economic conditions. This trend is expected to persist until a political resolution is on the horizon, which remains unlikely in the near term.

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Ashu Agarwal on “Jokowi Plans Record Spending in Indonesia’s Election Year”

“Jokowi has proposed significant increases in subsidies and social welfare spending in 2019 to win support in the upcoming election while reallocating funds away from its infrastructure budget to prevent an increase in its budget deficit. As the government’s priorities change in 2019, B2G companies supporting the government in its infrastructure drive can expect demand to trend downwards.

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Martin Belchev on “Workers’ Interest vs. “Slave Law”: Chaos, Protests and Scandals Accompany Final Vote”

“The Hungarian government adopted two controversial bills that prompted series of protests in Budapest – judicial reform of the courts and a bill that extends the number of hours that employees can work overtime from 250 to 400. The bill should help in taking off some pressure from the labor market, but is widely unpopular and likely to cause more protests in the coming days.

Link to article | Read More of Martin’s Commentary | Have a Question for Martin?

Zeynep  Kosereisoglu on “Prime Dubai property prices set to fall 2.4% in 2019

“Weak economic activity, slowdown in mid – high income expat arrivals and shifting tourist profiles, alongside high costs are resulting in declining demand for real estate in Dubai. While a major property sector crash isn’t expected, sales and prices will continue in a downward trajectory until oversupply can be corrected.

Link to article | Read More of Zeynep’s CommentaryHave a Question for Zeynep?

Ryan Connelly on “ECB to halt expansion of €2.6tn QE programme

“The end of ECB QE – the constant monthly addition of billions of euros to the system in a bid to stimulate the domestic economy – has now ended. Economists are uncertain on the impact. The best case is that, with rates unchanged, there is no impact on markets. The worst case is this will lead to lower euro liquidity, both within Europe and for countries that borrowed in Euros to fund imports.

Link to article | Read More of Ryan’s CommentaryHave a Question for Ryan?

Pratima SinghPratima Singh on “India Central Bank’s New Chief Vows to Uphold Institution’s Autonomy

“A former economic affairs secretary, Das is a pro-government appointment. He has stressed the need to balance RBI autonomy with government considerations. The quick appointment of a new governor will help to cushion markets in the short run. However, increasing government interference and lingering doubts over the RBI’s independence could be detrimental to investor sentiment in the medium-term.

Link to article | Read More of Pratima’s CommentaryHave a Question for Pratima?

Mark McNameeMark McNamee on “Russian central bank lifts rates on inflation, sanctions concerns

“Very conservative macroeconomic policy is set to continue throughout 2019, especially with the Kremlin focused on ensuring economic stability – albeit at the sacrifice of growth – for political reasons. Note that rates were in part raised to offset coming ruble weakness from the decision to restart purchases of dollars to boost reserves in January, another highly conservative economic move itself.

Link to article | Read More of Mark’s Commentary | Have a Question for Mark?

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