SAUDI ARABIA: Government delivers fiscal adjustment
● Nominal steps Saudi Arabia took in recent years when it did not need to, such as imposing a Value Added Tax and offering bonds on Saudi public sector firms, will become core parts of government strategy going forward. ● The government is balancing between continuing capital … Become a member to read the […]
MEXICO: Discrepancy widens between monetary and fiscal stimulus
Developments this week highlight the divergence between the government led by President Andres Manuel Lopez Obrador (AMLO) and the Central Bank (Banxico). Without coordinated fiscal and monetary action, the worst-case scenarios for the economy are more likely to materialize; thes… Become a member to read the rest of this article
SOUTH AFRICA: Piecemeal economic response
● Over the next day or two, decisions from today’s cabinet meeting may emerge regarding social grants and the phased restart of some sectors. ● The South African Reserve Bank (SARB) continues to lead the economic policy response to the pandemic and the extended lockdown. ● … Become a member to read the rest […]
Macro Series – Global Letter – Monetary Finance – Redux
Policymakers are not quite there yet, but are edging towards outright monetary finance. Forward thinking We have long argued that what was once considered unconventional monetary policy was here to stay and, if anything, likely only to become more unconventional. This st… Become a member to read the rest of this article
EUROPE/MACRO: The politics of “bazooka” frustration
● Last week, the fiscal and economic measures announced by individual member states created high expectations, especially when Germany’s finance minister joined the chorus of those referring to “bazookas” lately. ● Yesterday’s Eurogroup meeting could, therefore, only disappoin… Become a member to read the rest of this article
Macro Series – Global Letter – The day after tomorrow
The real challenge, for policy and more, will come after the virus recession is over. You wouldn’t choose to start from here. But the reality is that after a long, hesitant, and uneven upswing, the world economy is being tipped into recession – by a virus. The consensus – … Become a member to […]
BRAZIL: Late pro-growth strategy welcome but pandemic is the new driver
● President Jair Bolsonaro now recognizes the gravity of the COVID-19 pandemic. ● The government’s renewed push to collaborate with Congress has met with resistance. ● To spend or not to spend can no longer dictate priorities in the presence of a pandemic. … Become a member to read the rest of this […]
Macro Series – Global Letter – Easy Target
The Bank of England has come under attack for cutting rates. This is unfair and misguided. Back to the bottom The Bank of England has followed the example of the Federal Reserve, and slashed its major policy rate by 50bps. UK Bank Rate is now back down at a 326-year low … Become a […]
SOUTH AFRICA: Troubled state of the nation
● President Cyril Ramaphosa’s State of the Nation Address (SONA) today, 13 February, scores points mainly for being realistic about the dire state of the economy. ● It is probably wise that, despite prior media speculation, he eschewed making grand announcements about Eskom re… Become a member to read the rest of this article