20 July 2016
In November 2010, Ghana Statistical Services announced new and revised gross domestic product (GDP) estimates. As a result, the estimated size of the economy was adjusted upward by more than 60%, suggesting that in previous GDP estimates economic activities worth about US$13 billion had been missed.
18 July 2016
EM ended last week on a soft note, due in large part to the attempted coup in Turkey. Weakness in the lira spilled over into wider EM weakness in thin Friday afternoon market conditions. The situation in Turkey has calmed, and so EM may gain some limited traction this week. However, that calm will likely be very fragile and so we retain a defensive posture concerning EM.
12 July 2016
One of the most hotly debated topics in development economics is what does it take to steer a poor country from Third World to First World status?
It is a debate of particular relevance in Africa, which is home to a large number of countries in the Third World category.
It also has some of the fastest-growing economies in the world.
11 July 2016
EM and other risk assets rallied on Friday after the strong US jobs data. It appears that markets are pricing in a benign backdrop for risk near-term; that is, the US economy is recovering but not by enough to warrant an imminent Fed rate hike. The July 27 meeting seems unlikely, and so the next likely window would be September 21. Yet EM typically weakens in the run-up to FOMC meetings and so investors should be very careful about taking on too much risk.
6 July 2016
In early June, the international debt-rating agency Standard & Poor’s granted a stay of execution by not downgrading the South African government’s IOU certificate to a “junk debt” status. This preserved the country’s credit worthiness as investment grade. South Africa should therefore be able to keep on sourcing external finance at a relatively affordable cost.
4 July 2016
EM and risk recovered nicely from the Brexit turmoil last week. Yet we think markets are being too carried away with the "low rates forever" theme and are likely underestimating the capability of the Fed to tighten before 2018. This Friday, the June jobs data could spark a shift in sentiment with a strong reading. Consensus is currently 175k jobs created, up from 38k in May.
4 July 2016
Whatever its final impact, in the short-term the UK’s EU referendum will increase global economic uncertainty, market volatility and economic risk. In Africa, most scenarios will prove costly, particularly among those economies highly exposed to UK trade, investment, banking and remittances.
1 July 2016
Indonesia’s parliament approved a tax amnesty bill, Korea announced KRW20 trln ($17 bln) in fiscal stimulus, Czech President Zeman said a referendum on EU and NATO membership should be held, Russia ended its tourism ban to Turkey, Brazil’s central bank is sending hawkish signals, Banxico hiked rates by a larger than expected 50 bp to 4.25%
30 June 2016
The UK has voted to leave the European Union (EU). South Africa has historical and very close trade ties with the UK. Most of these relations were inherited by the EU when South Africa signed a free-trade agreement with the bloc that came into effect in 2000. That agreement made both the UK and the EU jointly important trading partners.
30 June 2016
For years, Puerto Rico borrowed to offset falling revenues as its economy and population declined. This was never sustainable, and now the moment of reckoning has arrived.