What Our Analysts Are Reading – 1/4/2019

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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.


athanasia-kokkinogeniAthanasia Kokkinogeni on “Firms told to prepare for no-deal Brexit

“FSG believes that PM May will eventually manage to win a thin majority on the vote before March 2019, in fear of a No-Deal Brexit, but political volatility will remain high, weighing on consumer and business confidence as well as investors’ sentiment in Q1. MNCs should activate their contingency plans to safeguard their businesses ahead of a potential disruption.

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


Ashu Agarwal on “Indonesia posts narrowest budget deficit in 6 years in 2018”

“Indonesia recorded a fiscal deficit of 1.72% in 2018, maintaining its downward trajectory. While this is an indication of the government’s commitment to improving fiscal discipline, it’s spending quality is deteriorating as it relocates resources away from capital expenditure and into increasing social spending. For a more in-depth analysis, refer to our most recent market review on Indonesia.

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


Martin Belchev on “Kuwait’s plan to reduce expats ‘to impact economic growth'”

“The Kuwaiti government’s plan to reduce expat number by 1.5 million over the next seven years is likely to impact the pace of economic expansion, tighten the labor market, and change the overall profile of Kuwaiti consumers. Given the expected fall in energy revenues and the delay in VAT implementation, this will put more pressure on public finances and expenditures going forward beyond 2019.

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


Alex Schober on “Argentina says October economic activity falls, 7th straight month

“Argentina’s monthly economic activity index (EMAE) fell 4.0% YOY in October, resulting in a 1.7% YTD contraction. Nearly every industrial component of the index contracted, particularly wholesale and retail sales (-11.2%). FSG expects Argentina’s real GDP to fall 2.4% this year and to not grow (0.0%) in 2019.

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


Ryan Connelly on “Recession Indicators Flash Nothing Very Definitive

“One of our ‘Events to Watch for 2019’ is a US recession, but we put it at only a 15% likelihood. This would be a substantial departure from our base case of 2.1% 2019 US GDP growth. However, the US is definitely transitioning into a late business cycle. This makes further organic and inorganic growth expensive, but creates opportunities for premiumization.

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


William Attwell on “Zambia’s president fires army chiefs

“President Edgar Lungu’s decision to replace the army chief forms part of a series of steps intended to consolidate power in the country, which in the past months have included a government reshuffle and a ruling by the Constitutional Court allowing Lungu to stand for another term. MNCs should expect governance problems – and the associated costs and corruption risks – to continue through 2019.

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


Matthew KindingerMatthew Kindinger on “Congo Keeps Voters in the Dark About Election Results

“Much-delayed elections were held in Congo (DRC) on December 30, with final results expected to be released on January 15. If Emmanuel Shadary—the handpicked successor of outgoing president Joseph Kabila—wins the presidential vote, MNCs should prepare for an eruption of violent protests, especially in urban areas. Blocked internet connections will also cause operational disruption for MNCs.

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

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