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transcript
16 August 2013
Emerging Markets
Weekly Economic
Briefing
Divergence in emergers’ monetary policy
This year economic activity across the emergers has been subdued but inflation has
generally remained moderate, allowing many countries to loosen policy. But in some
countries policy has been much more constrained and the constraints have grown in
recent months. Currencies have generally depreciated, particularly in those countries that
rely on external financing to fund a sizeable current account deficit. In several countries
this has added to existing inflation pressures. In this article we look at the factors
influencing monetary policy choices in the emergers.
The policy dilemma in Brazil is particularly stark, with high inflation demanding tighter
policy despite a prolonged period of weak economic activity. In Turkey and Indonesia,
falling exchange rates are exacerbating existing inflation pressures and policy is already
being tightened. In India, until the currency plunged in May we had expected further policy
easing but sustained currency weakness and rising inflation have now forced the central
bank to tighten monetary conditions. By contrast, some of the major emergers still have
scope to ease policy if growth disappoints in H2; indeed, we expect Russia to start cutting
rates in the coming months. Meanwhile, China has tightened monetary policy modestly in
recent months but this action has been prompted by considerations of long-term financial
stability (to dampen shadow banking) rather than by any fears of inflation.
Currency vs US$
Latest Date
Changed
Highest
Interest rate
Lowest
Interest rate
12 month
average
Latest % change over 12
months to 14 Aug
China 2.25 Dec-10 2.25 1.80 ↑ 2.3 2.7 3.9
India 7.25 May-13 9.00 4.75 ↑ 10.0 9.6 -9.3
Indonesia 6.50 Jul-13 12.75 5.75 ↑ 5.3 8.6 -7.9
Korea 2.50 May-13 5.25 2.00 ↓ ? 1.4 1.4 1.1
Malaysia 3.00 May-11 3.50 2.00 ↓ ? 1.5 1.8 -4.9
Philippines 3.50 Oct-12 7.50 3.50 ↓ ? 3.1 2.5 -4.0
Thailand 2.50 May-13 5.00 1.25 ↓ ? 2.8 2.0 0.7
Brazil 8.50 Jul-13 12.50 7.25 ↑ 6.0 6.3 -12.8
Chile 5.00 Jan-12 8.25 0.50 ↓ ? 1.9 2.2 -5.1
Mexico 4.00 Mar-13 8.25 4.00 ↓ ? 4.1 3.5 3.5
South Africa 5.00 Jul-12 13.50 5.00 → 5.5 5.5 -17.9
Czech Rep 0.05 Nov-12 2.75 0.05 → 2.2 1.4 -3.0
Hungary 4.00 Jul-13 11.50 4.00 ↓ 3.7 1.8 -6.7
Poland 2.50 Jul-13 6.00 2.50 ↓ 1.9 1.1 -2.9
Russia 8.25 Sep-12 13.00 7.75 ↓ ? 6.8 6.5 -7.3
Turkey 4.50 Apr-13 7.00 4.50 ↑ 7.5 8.9 -14.0
* vs basket, ** vs Euro
Recent cycle InflationPolicy Rate
Emerging Markets: Monetary Policy and Inflation
Direction of
latest monetary
conditions
*
******
**
16 August 2013
Emerging Markets Weekly Economic Briefing
The policy dilemma is especially awkward in Brazil, so growth will stay low for longer
In recent months, the Brazilian central bank has raised the key Selic interest rate to 8.5% as
inflation breached the 6.5% upper target in March and has remained high since then. In addition,
the currency fell sharply against the US$ in May and June and remains 12% lower than a year
earlier, pressured by the current account deficit widening to over US$80bn this year. The weak
currency will exacerbate the inflation pressures. And while the authorities would like to see faster
growth (after two years of disappointingly sluggish activity), they cannot ignore inflation given the
country’s hyperinflationary history and the particularly marked impact it has on squeezing real
incomes of the poor (which might lead to further bouts of social unrest). As a result, we expect
further rate hikes, taking Selic to 9.75% by the end of the year. This should gradually bring
inflation under control and support the currency, but it will also mean another year of modest
growth. We now expect the Brazilian economy to grow by just 2.3% in 2014.
High inflation has also prompted tighter policy in Indonesia
By contrast, in Indonesia economic activity has reasonable momentum. In an effort to combat
higher inflation expectations triggered by fuel prices rising a third (CPI inflation rose to 8.6% in
July after subsidies were cut), Bank Indonesia has increased the key interest rate by 75bp in
recent months. Inflation pressures have also been exacerbated by a weakening currency, as the
IDR has fallen 8% over the past twelve months, undermined by the country running a small
current account deficit for the first time since the 1990s (which has made the economy more
vulnerable to swings in global sentiment). In addition to the rises in interest rates, the authorities
have intervened very heavily in the foreign exchange market, running down their reserves to limit
the fall in the IDR (reserves in July fell to US$92.7bn, down US$20bn from end-2012). On
balance we expect the bank to now leave interest rates on hold in the coming months and only
tighten further when the global economy is much stronger in mid-2014. We forecast that inflation
will fall back to 5% or so next year once the fuel price hike drops out of the annual comparison,
while GDP growth should be dampened only modestly by these developments, moderating to a
5-6% pace.
2
4
6
8
10
12
14
16
18
20
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
% year
Headline CPI
Source: Haver Analytics / Oxford Economics
Brazil: CPI measures & Selic interest rate
CPI ex regulated
prices
& food & drink
Selic interest rate
0
2
4
6
8
10
12
14
16
18
20
2001 2003 2005 2007 2009 2011 2013
%
Policy interest rate
Source: Bank Indonesia
Indonesia: Interest rates & CPI inflation
CPI inflation
16 August 2013
Emerging Markets Weekly Economic Briefing
Currency weakness exacerbating inflation risks, forcing reversal in policy in Turkey…
Turkey’s domestic economy gathered momentum in H1 2013, sucking in more imports and
widening the country’s large current account deficit again. But having been one of the favourite
destinations for overseas money in the 12 months to early May, sentiment towards Turkey
changed quite dramatically when global markets began to worry about the likelihood of QE
starting to be reduced in the US. The disruption to Turkey relative to other leading emergers was
magnified by a sharp increase in domestic political tensions occurring at the same time. Against
this background, the currency has dropped significantly. This has exacerbated inflation
pressures, which were already elevated due to surging domestic food prices, and CPI inflation
rose to 8.9% in July. In response to this combination of adverse developments, the central bank
has had no choice but to reverse policy and tighten monetary conditions significantly. Although it
has not yet raised the main policy interest rate, it has tightened liquidity conditions so that 3-
month interbank rates have risen to more than 7.7% from under 5% in early May (feeding into
higher bank lending rates). At the moment we do not anticipate that market interest rates will rise
much further, and therefore expect only a comparatively brief period of subdued growth, but
renewed global tensions could result in further currency weakness and higher interest rates, with
dangerous consequences for the economy.
…and also in India, increasing the risks to growth
Until the rupee began to slide in May, we had expected the Indian central bank would follow its
25bp rate cuts in January, March and May with more easing to support activity. But while growth
remains disappointingly modest, the currency dropped sharply in May and June, exacerbating
already high inflation risks (wholesale price inflation rose to 5.8% in July, while CPI inflation is still
close to 10%). The rupee is now 10% lower than a year earlier against the US$, which given the
importance of financing the current account deficit (5% of GDP last year or over US$90bn) and
the impact of rising oil import costs, has altered the central bank’s priorities. In July the central
bank kept its main official rate (the repo rate) unchanged but raised others (with the consequence
that 3-month interbank rates have jumped nearly 250bp) – forced to tighten actual monetary
conditions to maintain India’s attractiveness as a destination for foreign inflows. But despite this
latest development, provided markets stabilise in the coming months we expect the bank will
0
3
6
9
12
15
18
21
24
2006 2007 2008 2009 2010 2011 2012 2013
%
"Core" inflation
Source: Haver Analytics / Oxford Economics
Turkey: Interest rates and inflation
Average bank lending rate
1-week
interbank rate
-2
0
2
4
6
8
10
12
14
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
% year
Repo rate
Source: Oxford Economics
India: Interest rates and wholesale prices
Mumbai 3-month
offered rate
Wholesale prices
(WPI) inflation
16 August 2013
Emerging Markets Weekly Economic Briefing
resume its policy of cutting rates to support the real economy in Q4 2013. But clearly there is a
significant risk that the rupee will remain fragile, removing the bank’s room for manoeuvre. And if
policy remains tighter for longer, our forecast of stronger 6% GDP growth next year, up from 5%
in 2013, may be too optimistic.
China tightened policy modestly mid-year, but for long-term financial stability reasons
In China, growth is modest by historical standards and inflation remained moderate at 2.7% in
July. But although the combination of low inflation and more subdued economic activity would
seem to justify a continued loose policy, effective monetary conditions have actually tightened in
recent months. Having surged to 5.8% in late June, the 3-month SHIBOR rate has subsequently
fallen back to 4.7%, but this is noticeably higher than May’s level of 3.9%. But unlike Brazil and
India, whose recent monetary policy actions are essentially responses to short-term concerns
about inflation and the exchange rate, China’s recent policy adjustment reflects the authorities’
determination to ensure financial stability for the longer term and to ensure that the economy
does not become excessively dependent on cheap credit (by clearly indicating that it wants to
dampen the expansion of the shadow banking sector).
Weak ZAR means that South Africa’s central bank is ‘boxed in’
In South Africa, although growth is weak, inflation is relatively high (just within the target range
ceiling), its currency has depreciated the most of all the major emergers over the last 12 months
(down almost 18% against the US$) and its current account deficit is set to exceed 6% of GDP
again this year. As a result, the central bank is ‘boxed in’ – it does not want to raise interest rates
to support the currency as this might lead to even weaker growth, but nor can it cut interest rates
further, as this might spark a completely uncontrolled fall in the currency, which in turn would lead
to rapidly accelerating inflation and a sharp erosion of consumers’ purchasing power.
But Hungary and Poland have loosened monetary policy substantially this year
By contrast, some emerger central banks have been in a position this year to move more
aggressively than expected on interest rates to support their real economies, as inflation has
fallen sharply and their exchange rates have not fallen too dramatically. In Hungary, headline CPI
inflation has fallen from 5% at the end of last year to 1.8% in July. This, together with a more
0
1
2
3
4
5
6
7
2007 2008 2009 2010 2011 2012 2013
%
Source: Haver Analytics
China: 3-month SHIBOR rate
60
65
70
75
80
85
90
95
100
105
Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13
Index v US$ (Dec 30, 2010 = 100)
Source: Haver Analytics
South Africa: Exchange rate
depreciation
16 August 2013
Emerging Markets Weekly Economic Briefing
aggressive policy approach after a change of personnel, has led to the central bank there cutting
rates from 7% in August last year to 4% currently, and we expect another 50bp of cuts in the next
few months. Meanwhile, since November the National Bank of Poland has cut its main policy rate
from 4.75% to 2.5% (headline inflation has dropped from 2.4% in December to 0.2% in June and
1.1% in July). We now expect rates to be left on hold as, after a period of disappointingly weak
growth, we anticipate that the policy easing of the past year and the Eurozone moving out of
recession will induce a gradual improvement in the real economy; however, should the latter not
materialise, then further rate cuts are likely.
Russia is also expected to cut rates in the coming months to boost activity…
Economic activity has been disappointing in Russia this year; we are now forecasting GDP
growth of 2.2% this year, down from 3.7% expected in January. Moreover, inflation has started to
fall in recent months and this disinflationary trend should continue in H2 due to the strength of
this year’s harvest (we expect the headline rate to be under 5% in early 2014, down from July’s
6.5%). Against this background, we think the stage is set for a concerted monetary easing cycle,
with the refinancing rate falling by 125bp to 7% by end-2014. The one factor that may impede this
easing is the performance of the rouble, which has slipped over the last year despite relatively
firm oil prices.
…and a number of other emergers have scope to loosen policy if activity disappoints
In Korea, Thailand, Chile and Mexico, inflation is moderate and their currencies have not
weakened that significantly against the US$ over the last year. In these countries, economic
activity was generally quite subdued in H1 2013 and we forecast a modest pick-up in H2 2013.
But if the recovery is weaker than anticipated, these countries have room to ease policy. Korea
and Thailand cut rates in Q2 but Mexico is perhaps more likely to cut rates again in H2 2013
(having cut in March). Mexican CPI inflation eased to 3.5% in July, falling within the 2-4% target
range for the first time since February and industrial activity and retail sales have stagnated this
year. We also think there is a high chance that Chile will cut its policy rate (currently 5%) in
response to low inflation (around 2%) and the ongoing uncertainty about the health of the global
economy, though as domestic demand is fairly robust we only expect one 25bp cut.
-2
0
2
4
6
8
10
12
14
16
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
% year
Poland
Source: Haver Analytics
Central & Eastern Europe: Consumer prices
Czech
Russia
Hungary
0
3
6
9
12
15
18
21
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
%
Source: Haver Analytics
Czech
Russia
Hungary
Emerging Europe: Policy interest rates
Poland
16 August 2013
Emerging Markets Weekly Economic Briefing
Latest data
Recent Data Releases
Previous month
Latest Comment
Brazil – Retail sales vol.
(s. adj.) (Jun)
– Economic Activity (s. adj)
(Jun)
0.0% m/m
4.0% y/y
-1.5% m/m
2.6% y/y
0.5% m/m
2.8% y/y
1.1% m/m
3.2% y/y
The monthly indicator of economic activity rebounded in June, but in Q2 as a whole was up just 0.9%, slower than Q1’s rise of 1.1%. Retail sales also rose on the quarter but only modestly compared with trend of recent years.
Russia – Exports (Jun)
- Imports (Jun)
- Trade balance (12m total)
-8.9% y/y
-6.2% y/y
$175.7bn (May)
1.8% y/y
3.6% y/y
$175.5bn (Jun)
The trade surplus may fall faster in H2 and 2014 if domestic demand and imports start to pick up again.
India – Industrial Output (Jun)
– Wholesale prices (Jul)
– Food prices (Jul)
– Consumer Prices (Jul)
– Exports (Jul)
- Trade balance (12m total)
-2.9% y/y
4.9% y/y
8.6% y/y
9.9% y/y
-4.6% y/y
-$204.5bn
-2.2% y/y
5.8% y/y
9.5% y/y
9.6% y/y
11.6% y/y
-$199.3bn
Industrial output fell y/y for a second successive month in June and the outlook remains weak as the July manufacturing PMI fell to its lowest in more than four years. The weaker currency is putting pressure on prices and wholesale prices picked up in July. More encouragingly, exports rose strongly in July.
Korea – Unemployment (Jul)
– Employment (Jul)
3.2% (seas. adj.)
1.4% y/y
3.2%
1.5% y/y
Employment continues to increase at a solid pace – suggesting steady growth in services.
Mexico – Ind. Output
(Jun, s. adj.)
1.1% m/m
0.3% y/y
0.0% m/m
-1.5% y/y
Although overall industry was flat in June, manufacturing did rise on the month but its trend so far this year has been subdued.
Turkey – Ind. Output (Jun, s. adj.)
– Current account (12m total)
-0.7% m/m
0.8% y/y
-$53.2bn (May)
1.4% m/m
4.3% y/y
-$53.6bn (Jun)
Industrial output increased by 1.3% on the quarter in Q2 despite weaker export volumes, suggesting strengthening domestic demand. The latter has led to a widening current account deficit but fast growth in exports of services is providing some offset.
S. Africa – Retail sales vol.
(Jun, s. adj.)
2.1% m/m
5.3% y/y
0.0% m/m
3.0% y/y
Retail sales were up 1% on the quarter in Q2. The consumer remains key driver of economy.
Singapore – GDP (Q2,
s. adj)
– Consumer spending (Q2)
– Export Volumes (Q2)
– Fixed Investment (Q2)
0.4% q/q
0.1% y/y
1.3% y/y
-4.1% y/y
-5.8% y/y
3.7% q/q
3.7% y/y
2.7% y/y
3.1% y/y
-3.8% y/y
The economy rebounded in Q2, with both manufacturing and services growing strongly. The Ministry of Trade and Industry upgraded its forecast for GDP growth this year to 3.5% from 2.5%. But machinery investment continued to fall significantly, reflecting global uncertainty.
Poland – GDP (Q2, s. adj)
– Exports (Jun) (EUR)
0.1% q/q
0.4% y/y
2.1% y/y
0.4% q/q
1.1% y/y
7.1% y/y
Some improvement in growth, helped by end to Eurozone recession. Boost from interest rate cuts should lead to faster q/q growth in 2014.
Czech – GDP
(Q2, seas. adj.)
-0.8% q/q
-1.9% y/y
0.7% q/q
-1.2% y/y
The economy grew in Q2 for the first time in nearly two years.
Hungary – GDP
(Q2, s. adj.)
0.6% q/q
-0.5% y/y
0.1% q/q
0.2% y/y
Advance estimates suggest the economy struggled to make any headway in Q2.
16 August 2013
Emerging Markets Weekly Economic Briefing
Events
Monetary policy meetings in past week
Key rate (now) Outcome Comment
August 15th - Indonesia 6.5% (Policy rate) Unchanged Bank Indonesia left the key interest rate on hold as
expected but took a number of measures to try to curb credit growth and stop inflation expectations increasing. The bank cut the ceiling on the loan-to-deposit ratios of commercial banks to 92% from 100% and said it plans to increase the secondary minimum reserve requirement for rupiah deposits from 2.5% to 4%.
Aug 14th - Chile 5.0% (Policy rate) Unchanged The central bank has not changed interest rates for 19 months now. However, we expect the main policy rate to be cut to 4.75% next month. With inflation (2.2% in July) still well below the 3% target and likely to fall below 2% again later this year (inflation ex food and energy was under 1% in July), the central bank has scope to bolster the economy in the face of a subdued external outlook. Domestic activity remains reasonable so we expect the loosening to be limited to one cut.
Aug 9th - Russia 8.25% (Refinancing
rate) Unchanged The central bank left the interest rate on hold,
suggesting that it will wait until inflation drops below 6% before easing rates. Inflation slowed to 6.5% in July and will fall below 6% within the next few months (influenced by a good harvest). As a result, we think the bank will start lowering rates soon although it will have to keep an eye on the rouble, which has weakened over the last couple of months.
For more information contact Clare Howarth (chowarth@oxfordeconomics.com) or
Sarah Fowler (sfowler@oxfordeconomics.com)
16 August 2013
Emerging Markets Weekly Economic Briefing
Asia
70
80
90
100
110
120
130
140
150
160
170
2000 2002 2004 2006 2008 2010 2012
2005=100 (seasonally adjusted)
Latin America
Source: Haver Analytics / Oxford Economics
Emerging Markets: Industrial output
East Asia
ex China
Emerging Europe ex Russia
(inc. Turkey)
India
-20
-15
-10
-5
0
5
10
15
20
1995 1997 1999 2001 2003 2005 2007 2009 2011 2013
% year
Source: Haver Analytics
South East Asia: Real GDP
Indonesia
SingaporeMalaysia
4
6
8
10
12
14
16
18
20
2001 2003 2005 2007 2009 2011 2013
% year
Industrial
output
Source: CEIC
China: Industrial output & retail sales volumes
Retail sales
3 month moving average
-2
-1
0
1
2
3
4
5
2001 2003 2005 2007 2009 2011 2013
% year
Source: Korea National Statistics Office
Korea: Employment
-4
-2
0
2
4
6
8
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
% quarter
Source: Haver Analytics
Hong Kong: Components of GDP
Consumer
spending
GDP
Exports of
services
-8
-4
0
4
8
12
16
20
2000 2002 2004 2006 2008 2010 2012
% year
China
Source: Haver Analytics
Korea producer
prices
Asia: Manufacturing producer prices
16 August 2013
Emerging Markets Weekly Economic Briefing
Asia
1
2
3
4
5
6
7
8
9
10
2001 2003 2005 2007 2009 2011 2013
%
Korea
Source: Haver Analytics
Emerging Asia: Short-term interest rates
China
India
Thailand
72
76
80
84
88
92
96
100
104
108
Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13
Index (Dec 30, 2010 = 100)
China
Source: Haver Analytics
Emergers: Exchange rates v US$
India
Indonesia
Korea
appreciation
94
96
98
100
102
104
106
108
110
Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13
Index (Dec 30, 2010 = 100)
Malaysia
Source: Haver Analytics
Emergers: Exchange rates v US$
Thailand
Philippines
Singapore
appreciation
-3
0
3
6
9
12
15
18
21
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
% year
Total
Source: Oxford Economics
India: WPI inflation
Non-food
manufacturing
products (core)
Food
-40
-30
-20
-10
0
10
20
30
40
50
60
70
1997 1999 2001 2003 2005 2007 2009 2011 2013
% year
Exports
Source: India Ministry of Commerce
India: Exports & imports
3 month moving average
Imports
-10
-5
0
5
10
15
20
25
2006 2007 2008 2009 2010 2011 2012 2013
% year (3 month average)
Source: Oxford Economics
India: Manufacturing & electricity output
Manufacturing
Electricity
16 August 2013
Emerging Markets Weekly Economic Briefing
Latin America
85
90
95
100
105
110
115
120
125
130
135
2000 2002 2004 2006 2008 2010 2012
2003=100 (seasonally adjusted)
Manufacturing
output
Source: Haver Analytics / Oxford Economics
Mexico: Real economy indicators
Construction
-30
-25
-20
-15
-10
-5
0
5
10
15
20
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
%3 month annualised growth
Source: Haver Analytics
Brazil: Monthly economic activity indicator
Year-on-year
growth
70
80
90
100
110
120
130
140
150
160
2000 2002 2004 2006 2008 2010 2012
2007=100 (seasonally adjusted)
Source: IBGE
Brazil: Industrial output & retail sales volumes
Retail sales
Industrial output
-4
0
4
8
12
16
20
24
28
1997 1999 2001 2003 2005 2007 2009 2011 2013
% year
Chile
Source: Haver Analytics
Latin America: Consumer prices
Mexico
Colombia
Brazil
-20
-10
0
10
20
30
40
50
1997 1999 2001 2003 2005 2007 2009 2011 2013
US$ bn
Source: Haver Analytics
Latin America: Trade balance
12 month total
Mexico
Argentina
Brazil
Chile
70
75
80
85
90
95
100
105
110
Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13
Index (Dec 30,2010 = 100)
Chile
Source: Haver Analytics
Emergers: Exchange rates v US$
Brazil
depreciation
Argentina
Mexico
16 August 2013
Emerging Markets Weekly Economic Briefing
Emerging Europe
-30
-25
-20
-15
-10
-5
0
5
10
15
20
25
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
% year
Source: Haver Analytics
Russia: Industrial output
Mining
Manufacturing
80
85
90
95
100
105
110
115
2005 2006 2007 2008 2009 2010 2011 2012 2013
2008Q1=100
Poland
Source: Haver Analytics / Oxford Economics
CEE: Real GDP (seasonally adjusted)
Romania
Czech
Hungary
-30
-20
-10
0
10
20
30
40
2005 2006 2007 2008 2009 2010 2011 2012 2013
% year
Poland
Source: Haver Analytics
Central & Eastern Europe: Goods' exports
3 month moving average (in
EUR terms) Slovak
Czech
Germany
-20
0
20
40
60
80
100
120
2005 2006 2007 2008 2009 2010 2011 2012 2013
% year
Source: Haver Analytics
Russia: Credit growth
Corporate rouble loans
Personal rouble loans
-40
-30
-20
-10
0
10
20
2001 2003 2005 2007 2009 2011 2013
20
40
60
80
100
120
140
160
180
200
220US$ bn
Russia (RHS)
Source: Haver Analytics
Central & Eastern Europe: Trade balance
12 month total
Poland
Hungary
Czech
US$ bn
-5
0
5
10
15
20
25
30
2001 2003 2005 2007 2009 2011 2013
% year
Estonia
Source: Haver Analytics
Central & Eastern Europe: Consumer prices
Latvia
Romania
Bulgaria
Lithuania
16 August 2013
Emerging Markets Weekly Economic Briefing
Rest of the world & financial developments
-20
-15
-10
-5
0
5
10
15
1997 1999 2001 2003 2005 2007 2009 2011 2013
% year
Source: Haver Analytics
South Africa: Industrial output & Retail Sales
3 month moving average
Retail sales volumes
Manufacturing output
80
85
90
95
100
105
110
115
120
2005 2006 2007 2008 2009 2010 2011 2012 2013
2010=100 (seasonally adjusted)
Source: Haver Analytics
Turkey: Industrial output
-60
-45
-30
-15
0
15
30
45
60
2001 2003 2005 2007 2009 2011 2013
% year
Turkey
(goods)
Source: Haver Analytics
Turkey: Exports (US$)
3 month moving average
Turkey (services)
60
65
70
75
80
85
90
95
100
105
Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13
Index (Dec 30, 2010 = 100)
Source: Haver Analytics
Emergers: Exchange rates
Turkey (v Euro)
depreciation
S. Africa (v US$)
3
4
5
6
7
8
9
10
11
12
13
Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13
%
Poland
Source: Haver Analytics
Emergers: 10 year government bond yields
Brazil
South Africa
Turkey
70
80
90
100
110
120
130
140
Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13
Index (Dec 30, 2010 = 100)
Source: Haver Analytics
Emergers: Equity markets
Emergers (MSCI, US$)
US S&P 500
16 August 2013
Emerging Markets Weekly Economic Briefing
China Brazil Korea India Mexico Russia Turkey Taiwan Poland
2012
Jul 9.2 -3.9 -0.6 -0.1 4.6 3.4 3.3 -0.2 4.4
Aug 8.9 -1.9 -2.5 2.0 3.6 2.1 0.5 1.3 1.4
Sep 9.2 -0.7 -1.8 -0.8 3.5 2.0 3.5 5.2 -1.6
Oct 9.6 1.1 -0.7 8.3 2.0 1.8 0.8 2.4 0.7
Nov 10.1 -0.9 2.2 -1.0 3.1 1.9 4.0 5.8 -1.7
Dec 10.3 -1.7 4.1 -0.5 0.0 1.4 -1.3 4.3 -4.5
2013
Jan 9.9 3.0 0.6 2.5 0.4 -0.8 2.2 1.4 -2.3
Feb 9.9 -0.7 -1.6 0.6 1.1 -2.1 3.9 5.3 -2.3
Mar 8.9 1.2 -1.4 3.5 0.5 2.6 1.3 -1.7 0.8
Apr 9.3 3.5 -1.4 1.9 -2.1 2.3 3.3 -1.8 -0.4
May 9.2 1.9 -2.7 -2.9 0.3 -1.4 0.8 -1.0 -0.9
Jun 8.9 4.2 -1.3 -2.2 -1.5 0.1 4.3 1.5 4.5
Jul 9.7 - - - - -0.7 - - -
Industrial Production
Percentage changes on a year earlier unless otherwise stated
China Brazil Korea India Mexico Russia Turkey Taiwan Poland
2012
Jul 1.8 5.2 1.5 9.9 4.4 5.6 9.1 2.5 4.0
Aug 2.0 5.2 1.2 10.0 4.6 5.9 8.9 3.4 3.8
Sep 1.9 5.3 2.0 9.7 4.8 6.6 9.2 3.0 3.8
Oct 1.7 5.4 2.1 9.8 4.6 6.5 7.8 2.3 3.4
Nov 2.0 5.5 1.6 9.9 4.2 6.5 6.4 1.6 2.8
Dec 2.5 5.8 1.4 10.6 3.6 6.6 6.2 1.6 2.4
2013
Jan 2.0 6.2 1.5 10.8 3.3 7.1 7.3 1.1 1.7
Feb 3.2 6.3 1.4 10.9 3.6 7.3 7.0 3.0 1.3
Mar 2.1 6.6 1.3 10.4 4.3 7.0 7.3 1.4 1.0
Apr 2.4 6.5 1.2 9.4 4.6 7.2 6.1 1.0 0.8
May 2.1 6.5 1.0 9.3 4.6 7.4 6.5 0.7 0.5
Jun 2.7 6.7 1.0 9.9 4.1 6.9 8.3 0.6 0.2
Jul 2.7 6.3 1.4 9.6 3.5 6.5 8.9 0.1 1.1
Consumer prices
Percentage changes on a year earlier unless otherwise stated
16 August 2013
Emerging Markets Weekly Economic Briefing
China Brazil Korea India Mexico Russia Turkey Taiwan Poland
2012
Jul 1.0 -5.6 -8.8 -12.2 3.1 -0.6 8.8 -11.5 -4.6
Aug 2.7 -14.4 -6.2 -9.7 5.2 -6.0 12.6 -4.0 -9.4
Sep 9.9 -14.1 -2.0 -10.8 5.4 0.2 19.6 10.3 -6.1
Oct 11.6 -1.7 1.0 -1.6 5.2 2.9 19.7 -1.9 11.4
Nov 2.9 -6.0 3.8 -4.2 5.3 -2.5 13.2 0.8 3.3
Dec 14.0 -10.8 -6.0 -1.9 4.1 -4.0 5.0 8.9 -2.6
2013
Jan 25.0 -1.1 10.9 0.8 -0.7 -1.5 7.5 21.6 9.4
Feb 21.7 -13.8 -8.6 4.2 -0.9 -6.6 7.9 -15.8 6.4
Mar 10.0 -7.6 0.2 7.0 1.6 -4.6 2.4 3.2 -3.0
Apr 14.7 5.4 0.4 1.7 -0.6 -2.0 -3.4 -1.9 11.4
May 1.0 -6.0 3.0 -1.1 1.6 -8.9 0.8 0.7 3.5
Jun -3.1 9.2 -1.0 -4.6 4.4 1.8 -3.1 8.6 12.8
Jul 5.1 -0.9 2.7 11.6 - - - 1.6 -
Exports (US dollars)
Percentage changes on a year earlier unless otherwise stated
China Brazil Korea India Mexico Russia Turkey Taiwan Poland
2012
Jul 4.6 -5.1 -5.4 -1.1 0.0 10.6 -6.5 -3.3 -11.2
Aug -2.5 -13.9 -9.7 -5.1 5.6 1.8 -0.3 -7.9 -15.4
Sep 2.4 -13.7 -6.1 5.1 0.1 2.0 -2.3 1.2 -8.5
Oct 2.3 1.7 1.6 7.4 6.4 12.0 -2.3 -1.8 3.3
Nov 0.0 -2.5 0.9 6.4 8.7 2.8 1.4 0.1 -1.1
Dec 6.1 -4.5 -5.3 6.3 2.3 6.3 0.2 1.5 -2.3
2013
Jan 29.0 14.7 3.9 6.1 6.7 13.3 8.2 22.2 4.1
Feb -15.2 3.1 -10.7 2.6 2.7 7.6 15.2 -8.5 -4.7
Mar 14.0 1.4 -1.9 -2.9 4.8 0.5 2.9 0.2 -3.4
Apr 16.8 15.7 -0.3 11.0 0.4 11.3 15.7 -8.2 2.9
May -0.3 4.0 -5.2 7.0 4.2 -6.2 7.9 -8.0 -3.6
Jun -0.7 1.5 -2.5 -0.4 5.3 3.6 6.0 6.8 4.5
Jul 10.9 25.2 3.0 -6.2 - - - -7.6 -
Imports (US dollars)
Percentage changes on a year earlier unless otherwise stated