A stable democracy, rule of law, rapid economic growth and almost all the other tick-boxes, plus new oil discoveries, have won Ghana a lot of fans lately.
So it’s worth paying attention to anything which goes against the sunny narrative (leaving aside its continued under-performance in the Africa Cup of Nations, which can now almost be taken as given). This comes in the form of two recent reports from rating agencies Fitch and Moody’s.
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When times are tough, you don’t need good news to cheer investors – even an absence of bad news comes as a relief.
After weeks of concern around a possible sovereign downgrade for India, Moody’s has reaffirmed its government bond rating of BBA3, labelling it “stable”. Continue reading »
Jacek Rostowski (pictured), Poland’s finance minister, long insisted he would succeed in driving Poland’s deficit below 3 per cent of GDP this year, despite a chorus of scepticism from economists who felt that the target was very optimistic given the eurozone’s economic turmoil.
On Wednesday, Rostowski had to concede defeat, admitting that the deficit would hit 3.5 per cent of GDP this year instead of the planned 2.9 per cent, largely because of Poland’s slowing economy, affected by slumping domestic demand and continuing gloom in the eurozone. Continue reading »
Balcerowicz: envious of the neighbours
Poles have long held a fascination with the next-door Czechs as an exemplar of hard-headed economic virtues that their own more romantic country would be wise to follow – something that arch-reformer Leszek Balcerowicz referred to when calling on countrymen to tackle more reforms, pointing out that Czech borrowing costs were lower than Poland’s.
The latest cost of 5-year credit default swaps (the cost of insuring against default) for the Czech Republic is 127.1 basis points, not far above Germany’s 107.1, while Poland is at 239.7bp (albeit far below Spain and Italy and in a different universe from Greece). Continue reading »
Battered by global headwinds and a weak domestic economy, the Indian government has divested itself of just $232.3m of equity in its listed state-owned companies in the current fiscal year ending March 2012. With only six weeks left, the total will fall far short of the $8.13bn goal.
But it seems ministers are trying to close some of the gap with a mega deal – selling a 5 per cent stake, worth around $2.4bn, in the Oil and Natural Gas Corporation, the energy giant. If nothing else, it should show much investor sentiment towards India has improved this year. Continue reading »
After a long, loud build-up Nigeria’s battle of the fuel subsidy got serious over a very quiet New Year’s weekend. If the government had hoped a muted announcement would lead to a muted reaction they were, to put it mildly, disappointed.
The removal of the subsidy led to a doubling of fuel prices on Monday morning, according to Reuters, and an unsurprisingly furious reaction from Nigerians for whom the subsidy had represented one of the few tangible benefits they received as citizens of Africa’s largest crude-oil producer. Continue reading »
Given the severe political, as well as economic, constraints within which he is forced to operate, Tendai Biti, Zimbabwe’s finance minister (pictured), did well to present a workmanlike, balanced 2012 budget to parliament last week.
Trying to secure consensus in a coalition administration in continuous electioneering mode is a near-impossible task, especially when it comes to the murky area of revenues from the country’s controversial Marange diamond fields. Continue reading »
Egypt’s markets tumbled again on Tuesday morning following another day of protest which culminated in the Egyptian cabinet offering its resignation to the ruling military council. Egypt’s headline EGX index fell 1.3 per cent in early morning trading, dropping to its lowest point since March 2009, when it hit 3389 points. It is currently trading at 3749.5.
Monday had already seen big losses on Egyptian markets – the EGX fell 3.6 per cent – as protests against the military-led government erupted in Tahrir Square over the weekend, fueling investor fears that election scheduled for November 28 would not bring calm or certainty to the country. Continue reading »
If the Turkish economy is performing a soft landing, it is so soft it is barely noticeable. Balance of payments data released on Tuesday revealed that, far from narrowing, the country’s current account deficit remains as hefty as ever.
The deficit was $6.8bn for September, about 80 per cent greater than the same month a year before, bringing the rolling deficit for the previous 12 months to a new record, at $77.6bn. Continue reading »
In announcing plans to increase sales taxes on alcohol, mobile phones, cars and cigarettes, Turkey’s government has made clear its intention to kill – or at least bruise – two birds with one stone.
The twin issues the tax increases are designed to address are the country’s current account deficit – at just under 10 per cent of GDP probably the most pressing of Turkey’s economic problems – and the budget deficit. Continue reading »
New figures have been released about Turkey’s most pressing economic problem – its hefty current account deficit. The good news, analysts say, is that it looks like the deficit has peaked. The bad news is that it is still set to be around 10 per cent of GDP by the end of the of the year – more than the economy can easily sustain.
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The Argentine government has trumpeted a slew of deals with a dozen car companies under which they have committed to balancing their car imports dollar for dollar with exports – a move designed to turn a $6bn deficit in the sector into a surplus.
But in reality, it is a classic bit of cobbled together government policy prompted by official alarm at the erosion of Argentina’s trade surplus, one of the pillars of its macroeconomic policy.
Why? Because some of the companies involved are making up their side of the bargain with other products that would have been exported anyway. Continue reading »