Each week FrontierView’s global team shares their view on key media stories, and what the implications are for your business. Have a question for our analysts? Email us at info@duckerfrontier.com to learn more.
Alex Schober on “Argentina Unveils Price Controls to Cool Rampant Inflation”
“MNCs should expect inflation to finally decelerate starting in June, but the price controls will create long-term inflationary pressures. It is evident that the Mauricio Macri administration unveiled these price freezes only to shore up support for the elections in October amid a worsening economy. However, we believe the electoral impact of this announcement is inconsequential.”
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Pratima Singh on “What Jet Airways’ Near-Collapse Says About India’s Economy”
“The lack of full-service airlines in India showcases an interesting characteristic of the country’s large, but extremely price sensitive, middle-income segment. It is often referred to as the “glocal” or the value segment—customers want global or comparable products, but only at local prices. For more details on the country’s competitive landscape read Winning in a More Competitive India.”
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William Attwell on “Labour Court Halts Kenya’s Housing Levy”
“One of the government’s headline “Big Four” reforms—the mass construction of low-cost housing—will face further delay due to a court decision temporarily halting its main financing mechanism. A new housing levy equivalent to 1.5% of every employed person’s salary was to come into effect in May. Any boost in B2B demand from the construction sector is now likely to be delayed to late 2019.”
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Ramiro Sugranes on “Colombia’s Industrial Production Index Increased by 3.2% in February”
“In line with FrontierView’s view, a moderate investment recovery is solidifying in Colombia. In February, industrial production increased by 3.2% YOY on the back of greater dynamism in the strategic oil sector and heightened beverage production. Multinationals should ensure that their supply chains are prepared to satisfy an uptick in B2B demand in 2019, while closely monitoring downside risks.”
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Martin Belchev on “Parliament Cancels Special Levy for Retail Chains”
“The controversial levy on retail sales in Slovakia was scrapped by the government, after the European Commission suspended it in early April. This outcome was expected by FrontierView, as the levy can be considered in breach of EU law. However, MNCs should still monitor the regulatory environment, but should note that the risk of similar measures has declined considerably.”
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William Attwell on “South African Retail Sales Suggest Economy Sluggish Before May Vote”
“Sluggish retail sales, which grew by 1.1% YOY in February (compared to 1.2% YOY in January), points to the underlying weakness in the economy. High unemployment and rising fuel and electricity costs means the outlook is unlikely to shift through Q2, with consumers likely to evidence high levels of price sensitivity, especially lower and middle-income segments, many of whom may trade down.”
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Ryan Connelly on “Consumer Spending Rebounded in March, Raising Expectations for Growth”
“The US consumer is resilient. Consumers are spending wage gains, their tax refunds, and expending their credit debt in order to fund current consumption. As employment growth is slowing, there are less new customers entering the marketplace. Firms should focus on building customer loyalty through value-added services and digital customer engagement, and pursue premiumization strategies.”
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Ashu Agarwal on “Indonesian President Wins New Term, but Challenger Won’t Go Quietly”
“Jokowi is set to stay in power following yesterday’s election. MNCs can expect continued improvements in the business environment due to his policy packages and focus on infrastructure development. But, with Indonesia competing against increasingly attractive markets such as Vietnam and Thailand, policy continuity is unlikely to be enough to attract the investment required to propel economic growth.”