Each week FrontierView’s global research team shares their view on key media stories, and what the implications are for your business.
Mark McNamee on “Belarus Comes In From the Cold As It Seeks to Distance Itself From Russia“
“As usual, President Lukashenko threatens to ‘defect’ from Moscow by teasing a turn to the West. This time is different, however, as Moscow is demanding Minsk sacrifice some sovereignty for future loans. Ultimately, most likely, Minsk will offer to unite the nations’ currencies (or a similar concession), obtaining vital funds from Russia, which is unwilling to allow Belarus to leave its orbit.”
Matthew Kindinger on “Confusion Over Nigeria’s Currency Regime Exposes Its Fragility”
“Nigeria’s central bank has downplayed speculation that reform to the country’s multiple exchange rate regime is imminent. However, MNCs should still prepare for some reform to the foreign currency regime over the coming year. FrontierView expects moderate depreciation to occur in late-2019 and early 2020 because pressure on the naira will build as demand for imports grow and oil prices soften.”
Alec Lee on “Brazil Justice Minister Sergio Moro Faces Firestorm Over Allegations of Bias”
“This event is very unlikely to derail the trajectory of pension reform in Congress, and as such we hold our view that the measure will be passed near the end of Q3. That said, expect some contained street protests over the coming months related back to this particular scandal.”
Ramiro Sugranes on “Colombia’s Finance Minister Leaves Fiscal Deficit Targets Unchanged for 2019 and 2020”
“Colombia’s finance minister stated that the nation will stick to its original near term fiscal deficit targets—despite being loosened in March by a committee amid Venezuelan migrant pressures. We believe it will be difficult to meet these targets, especially in 2020. The government’s credibility and ability to meet targets will impact market sentiment and the pace of the modest investment recovery.”
Zeynep Kosereisoglu on “Stronger Output Propels Saudi Arabia’s Non-Oil Business Activity in May”
“The Saudi economy continues to show signs of a gradual recovery, with the May PMI reaching a 17 month high of 57.3. An improvement in private sector output was due to a pick up in both domestic and export orders, as firms were able to start raising selling prices for the first time in seven months. MNCs must ensure local partners are positioning to capture the slow recovery in the economy.”
Martin Belchev on “EU Election Success Prompts Polish Cabinet Changes”
“Poland’s ruling PiS party changed several ministers who were elected as MEPs, following its outstanding performance in the EU elections. More notable, however, was the change of Finance Minister Czerwisnka, who did not support the government’s new social package. The latter also boosted the government’s popularity ahead of the autumn’s general election, which the PiS will likely win convincingly.”
Mark McNamee on “Kazakhstan’s Newly Elected Leader Calls Himself a ‘Reformer’ “
“MNCs should not get their hopes up for a reformist revolution in Kazakhstan; however, there is reason for optimism or gradual improvements in the business environment. The government has clearly recognized the clear signs of discontent in the country while not blind to the pressure from citizens for change in the wider region, whether in Ukraine, Russia, Uzbekistan, or Armenia in the past year.”