Will Falling Oil Prices Resolve Nigeria’s Dutch Disease?
There has been much speculation in recent months whether the price of oil will continue its downward spiral to spine chilling levels – $20 per barrel springs to mind. One can almost sense a slight quiver in the voices of investors and oilmen when asked how they would cope with such a scenario. Some argue ... Read more
GCC: How to Create Jobs for Nationals?
The GCC is growing, helped by crude production and expansionary policies. Despite the sluggish global outlook, the Eurozone recession, and Asia’s deceleration, the six Gulf Cooperation Council (GCC) countries – Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates – are growing the fastest in the Middle East and North Africa (MENA) region ... Read more
Mexico’s Tax Reform in the Works: Preview and Initial Considerations
After early speculation that President Peña Nieto would unveil his much anticipated tax reform during the 2013 spring congressional session (February 1st – April 30th), Finance Minister Luis Videgaray recently confirmed that the comprehensive tax and expenditure package would not be unveiled until the second half of this year. According to Videgaray and other PRI ... Read more
President Erdoğan’s New Turkey
Key takeaway – Prime Minister (PM) Erdoğan will win the Presidential elections in the first round, with 52 percent of the vote. Emboldened by popular support, over the next five years he will actively rule the country and re-shape key institutions to consolidate Presidential power. Tensions will rise internally and externally. The opposition will condemn ... Read more
The Global Economy’s Shifting Center of Gravity
In the current policy debate on whether China, India, and the rest of Asia can continue to grow without a return to international markets of the US consumer—or, indeed, the opposite whether those national-economies will from now form the engine of growth for the global economy—compelling empirical evidence has been relatively scarce. This posting seeks ... Read more
Recovery Still Policy-Led, Political Risks on the Rise, EMs Under Pressure
Five years into the crisis, the global recovery remains supported by policies[1]. In 2014, monetary policy will remain accommodative, to facilitate the healing of the financial system and private sector deleveraging. While the Federal Reserve (Fed) will gradually reduce quantitative easing (QE), the European Central Bank (ECB) and the Bank of Japan (BoJ) are likely ... Read more
Cash Exiting China
Something that I have thinking about for a few weeks – and was reminded of reading Ryan Avent this morning – is the series of pieces at FT alphaville regarding the outflow of cash from China. See here and here and here. The thinking had been that the renminbi was a one-way bet as China ... Read more
India’s Investment Slowdown: The High Cost of Economic Policy Uncertainty
By Rahul Anand and Volodymyr Tulin India, after witnessing spectacular growth averaging above 9 percent over the past decade, has started to slow in the last few years. The slump in infrastructure and corporate investment has been the single biggest contributor to India’s recent growth slowdown. India’s investment growth, averaging above 12 percent during the last decade fell ... Read more
The BRICS and the Bretton Woods Twins
The World Cup was not the only event of global significance to take place in Brazil this summer. The leaders of Brazil, Russia, India, China and South Africa met in the city of Fortaleza and announced the formation of two new financial institutions. One is the New Development Bank (NDB), which will finance “sustainable development” projects, ... Read more
For Richer, Not Poorer: Energy Subsidies in India
Many countries seek to protect poorer households by subsidizing the consumption of fuel products. However, recent IMF research shows that fuel subsidies are both inefficient and inequitable, including in India. But what about India? Are fuel subsidies also anti-poor? Sadly, yes. A new IMF working paper shows that India’s fuel subsidies are both fiscally costly and socially regressive. ... Read more