Showing posts from August, 2018

South Africa August 2018 Outlook

Momentum continued to wane into the second quarter as the anticipated “Ramaphoria”-driven liftoff of the domestic economy failed to materialize. Although economy-wide sentiment got a boost from Cyril Ramaphosa’s appointment to the country’s top post earlier in the year, employment gains have been muted since, while consumer-spending metrics have deteriorated. Moreover, manufacturing output has stumbled in recent months and survey-based data points to sluggishness across the private sector. On the external front, the ongoing global risk-off sent the rand into a freefall in early August and looks bound to fan inflationary pressures over the coming months. Meanwhile, a quarter-on-quarter contraction in the first quarter—held back by a fall in investment and moderating household spending—highlights the economic hurdles facing Ramaphosa as next year’s general election looms. 
• Full-year growth prospects have taken a hit from weak early-year readings, but greater political stability and f…

Saudi Arabia Outlook Improves August 2018

The economic recovery is gathering pace mostly due to OPEC’s decision to increase oil production in order to keep markets adequately supplied and high oil prices, which have stoked activity in the all-important oil sector. Moreover, the recovery is broadening as the impact of the VAT implemented in January fades, and gains from the recovery in the oilsector are slowly trickling down to the rest of the economy. The nonhydrocarbon PMI hit a six-month high in June, while credit growth and foreign reserves improved in Q2. Higher production and oil prices are also translating into an improvement in the government’s fiscal position and the current account balance, which recorded a healthy surplus in Q1. On the flip side, the government’s Saudization policy, which is expelling foreign workers, could create labor shortages in some sectors, while the crackdown on corruption implemented last year is deterring investment and spurring capital outflows. Rising oil production and higher prices for …

Oil Dynamic Reports - NY Fed

Oil is back in a big way - investments are picking up and many are going deep. The current US administration is heavy on fossil fuels and that has reinvigorated supply and demand. Of course the tariffs send a message counterproductive to this. It’s hard to think about how many oil and gas exports we are missing out on because of the tariff scare.
- Chad Hagan

"Increased supply pushed oil prices down over the past three weeks"

+ Despite somewhat stronger global demand expectations, a perceived loosening in supply led to a fall in oil prices over the past three weeks. In 2018:Q2, increasing demand expectations and decreasing anticipated supply led to rising oil prices.

+ Developments in global demand expectations since 2017:Q3 have reversed the largely supply-induced weakness in oil prices throughout the first half of 2017

+ Overall, since the end of 2014:Q2, both lower global demand expectations and looser supply have held oil prices down, though this trend seems to have rever…

Ukraine Outlook Is Stable August 2018

Ukraine’s recovery appears to have persisted in the second quarter, after growth picked up at the outset of the year. Domestic demand is expected to have remained in the driver’s seat in Q2: The sustained easing of inflationary pressures, coupled with improving labor market dynamics and strong remittance inflows, likely buttressed private consumption. In addition, household lending surged in the first half of the year against an increasingly stable banking sector. Meanwhile, the IMF has backed the country’s revised plans for an anti-corruption court after the amended law was approved by the Rada on 12 July. On a less positive note, in a move likely influenced by next year’s presidential and parliamentary elections, the government recently extended the gas-price freeze until the beginning of September, once again failing to fulfill one of the Fund’s key conditions and thereby reducing the prospects of receiving another tranche of funding in the coming months. • Domestic demand should …