What Our Analysts Are Reading – 12/21/2018

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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 “How Colombia’s tax structure changed following the financing law’s approval

“After a prolonged period of debate and watered-down proposals, Colombia’s anticipated tax reform has been approved. MNCs should evaluate how the new changes will affect their business strategies, including a gradual reduction of the corporate tax rate, greater income taxes on high-income individuals, investment incentives, and new value-added taxes for sugary beverages and beer, to name a few.

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Josef

Josef Jelinek on “Xi Jinping’s Strongman Rule Comes Under Fire as China Celebrates Deng’s Reforms”

“As China celebrates 40 years of “reform and opening up,” Xi Jinping’s foreign policy and strongman-led national development have drawn fire. Critics within the party are pointing to the flagging economy and deteriorating relations with the US as proof Xi has concentrated too much authority in his hands, made policy missteps and provoked pushback against China’s superpower ambitions abroad.

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athanasia-kokkinogeniAthanasia Kokkinogeni on “Italy strikes deal with EU over budget”

“Italy and the EU reached an agreement, ending the budget dispute which had worried investors, increasing Italy’s and other periphery markets’ borrowing costs as well as challenging European bank stocks. Despite the retreating European political uncertainty, the 2019 outlook for Italy remains muted on the back of slower exports, sluggish consumer and government demand.

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Alex Schober on “Argentina says economy contracted 3.5 pct in Q3 vs Q3 2017

“Argentina has officially entered a recession with its Q3 real GDP figure (-3.5% YOY). All components of GDP contracted, with the harshest dip coming from gross domestic investment (-11.2%). FSG expects real GDP to drop 2.3% this year and 0.0% in 2019. MNCs should expect a major drop in Q1 2019 GDP because of a high base of comparison, followed by a recovery in Q2 through Q4 2019.

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Ryan Connelly on “Fed Raises Rates, But Signals Slightly Milder Path of Future Increases

“As expected, Fed hiked today, but signaled only two hikes next year, due mainly to slowing GDP in 2019 (from 2.5% in September expectations, to 2.3% today). At FSG, we only expected two hikes in 2019 prior to this, and we forecast US GDP growth at slower 2.1%. This Fed decision brought their expectations for next year more in line with our view, which is a year of late business cycle growth.

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William Attwell on “South Africa May See Power Cuts Post Mid-January, Eskom CEO Says

“Power outages – caused by financial problems and maintenance backlogs at state-owned electricity utility Eskom – risk hobbling South Africa’s fragile economic recovery. MNCs and their customers will likely experience disruptions through Q1 2018 as “blackouts” continue.

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

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