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.
Alejandro Valerio on “Mexico’s Consumer Inflation Accelerates”
“Mexico’s consumer inflation accelerated to 4.38% in April because of higher travel and recreation costs ahead of Easter holidays. Despite this recent uptick, the annual inflation number has remained within Banxico’s target range of below 4%. Banxico is expected to leave its policy rate at 8.25% in May’s meeting, but it will start loosening monetary policy by at least 25 basis points in the coming months.”
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Pratima Singh on “Modi’s World: See What India’s Economy Has Done in Five Years”
“As the charts indicate, the Indian economy had a mixed performance under Mr. Modi. Positive developments include the implementation of the Insolvency and Bankruptcy Code and the Goods and Services Tax. Although, both policies have had limited short-term benefits. His controversial currency demonetization measure, however, had a large negative impact and remains one of his biggest economic failures.”
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Mansour El-Zahab on “Lebanese PM Warns of Catastrophe Without Austerity”
“Lebanon is expected to introduce its toughest austerity measures yet, as the government works on reducing the fiscal deficit to 9% in the new budget. Public sector wages are expected to be reduced for highest earners whilst low income brackets remain unaffected. FrontierView expects consumer demand to marginally reduce in a slow reaction. Consumption goods demand is likely to remain resilient.”
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Mark McNamee on “Incomes in Russia Fell in Q1 Because of the Stagnation of Wages”
“The continued decline in real incomes was expected amid the higher VAT rate and weak business confidence, which holds back investment. As inflation moderates in the coming months and the ruble continues to perform better than anticipated thanks to higher-than-expected oil prices and delayed US sanctions, purchasing power will gradually rise into H2, driving up spending.”
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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 expanding their credit debt in order to fund current consumption. As employment growth is slowing, there are fewer 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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Mansour El-Zahab on “Tunisia Reaches an Agreement with IMF on Fifth Review of Loan”
“Tunisia and the IMF have come to an agreement for the loan’s fifth review, allowing the disbursement of a tranche worth US$ 247 million. This comes after the Tunisian government implemented measures to increase social security taxes by 1% and 2% for employees and employers respectively. Consumer demand is expected to soften in 2019 as consumers are squeezed and purchasing power weakens.”
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Matthew Kindinger on “DRC: President Tshisekedi’s Leash Just Got a Little Tighter”
“Since becoming president of Congo (DRC) in January, Felix Tshisekedi has struggled to consolidate his rule – former president Kabila and his coalition party (the FCC) have been able to increase their majority in parliament following senate elections. MNCs should anticipate slow progress in economic reform that would generate new opportunities and stimulate growth in sectors beyond mining.”
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Ashu Agarwal on “LG Shifts Smartphone Production from South Korea to Vietnam”
“LG, among many other South Korean companies, is expanding its investments in Vietnam to reduce its manufacturing costs. Surging FDI into the country is likely to help boost industrial activity and income levels, creating opportunities for B2B and B2C MNCs. For information on how to build an effective strategy for the Vietnamese market, look out for our upcoming report on ‘Winning in Vietnam’.”