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Indonesia, the Philippines, Malaysia and Thailand are on the face of it a relatively homogeneous, integrated group of nations with similar trading partners. So why did the first two emerge from the 2008 financial crisis in a much better shape than the latter?
A working paper from the IMF concludes that it was because Indonesia and the Philippines were less open to trade and had greater fiscal stimuli.
Hungary, Romania and Latvia were allowed to exit the EU’s excessive deficit procedure, which they had been put into for running deficits above the permitted threshold of 3 per cent of GDP. More mixed news from Poland, which gained an extra two years to bring its deficit into line with requirements.
Answer: none at all, except in Slovenia, where any half-aware citizen would immediately recognise them as state-owned companies being prepared for privatisation to raise the cash to bail out Slovenia’s heavily indebted banks and balance the national budget.
Expectations of a supplementary budget worth about 10tn won ($9bn) helped drive the benchmark Kospi index up 1.8 per cent this week, after it fell to a five-week low on Friday on concerns over Cyprus.
Just as in most of Latin America, many Argentines were engrossed on Tuesday night with news of the death of Hugo Chávez in Venezuela.
It was then that Argentina’s economy ministry snuck out, belatedly, news of the country’s first primary budget deficit since 1996.
The Ghanaian government’s 2013 budget was presented to parliament on Tuesday, outlining plans to gradually bring the country’s fiscal deficit down to 9 per cent of GDP from its 2012 level of just over 12 per cent.
In the first major piece of economic policy since presidential elections held in December, the National Democratic Congress government led by president John Mahama said it would raise taxes and control government spending to calm concerns over a fiscal gap which grew to almost double its target level in 2012. But observers are skeptical about the extent of its commitment to balancing its books.
A key sticking point has been setting the benchmark oil price, which determines how much the government can spend and how much it must save. The spenders have won, though concerns will linger over optimistic assumptions about the health of Nigeria’s oil industry.
Lifting the EU excessive deficit procedure (EDP) against Hungary was one of the major topics discussed at the meeting between Viktor Orbán, the Hungarian prime minister, and José Manuel Barroso, European Commission president, last week.
Was this what the central bank expected? Last Wednesday, Brazil’s monetary policy makers held their benchmark interest rate steady on the grounds that its current level (7.25 per cent a year) was the right one to keep inflation on a downward course.
On Monday, market economists surveyed by the bank showed what they thought of that: inflation expectations for 2013 are up, from an average of 5.53 per cent last week to 5.65 per cent today.
How gloomy can you get? The Brazilian central bank’s latest weekly survey of market economists suggests the sky, or rather the ground, is the limit. The survey’s consensus on GDP growth this year is now 3.2 per cent, down from 3.26 per cent a week earlier, 3.3 per cent the week before that, 3.4 before that, 3.5 before that, and so on back in time to late November, when it began falling from the 4 per cent that had been expected for several months.
Hungary has seen a flurry of tax and legal changes in the past two years but the indications are “we are past the worst”, Eszter Gyuricsku of Deloitte, the professional services firm, told business people gathered in Budapest on Wednesday.
Unofrtunately for Gyuricsku, speaking at a seminar designed to champion Hungary as a location for shared service offices, barely 500m away Gyorgy Matolcsy, Hungary’s economy minister, was announcing that Hungary would not, after all, halve a special bank tax next year as planned and would, instead, double a financial transaction tax from 0.1 to 0.2 per cent on all bank transactions from January 1.