Tunisia's
new unity government, which will be formed in August, will benefit from a large
parliamentary majority and support from the country's main labour unions.
Nonetheless, it will still confront daunting socio-economic and political
challenges. Popular pressures and opposition from vested interests will
continue to slow the pace of reform, particularly in the run-up to local
elections scheduled for the end of the year. All three growth drivers of the
Tunisian economy – consumption, investment and exports – will remain mired with
problems, including the lingering effects of last year's terrorist attacks on
the tourism sector, the unresolved weaknesses of the banking system, and low
public investment.
We
project only a tepid recovery this year, with real growth of 1.7% compared to
an estimated 0.8% for 2015. Budgetary inflexibility, weak economic growth, and
growing social unrest will limit the ability of the government to narrow the
fiscal deficit. While job creation will gradually pick up over the coming
years, progress in reducing Tunisia's large unemployment rate will remain slow.
The government will struggle to deal with increases in the working age
population as well as growing female participation in the workforce.
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more information Visit at: http://www.marketresearchreports.com/business-monitor-international/tunisia-country-risk-report-q4-2016
Uganda's
growth will slow in 2016, with high borrowing costs weighing on consumer
spending and a deepening net exports burden. Economic activity is set to
rebound in 2017, as lower lending rates and relatively subdued inflation
bolster private consumption, while a spate of major planned infrastructure
projects bolster fixed investment. Ugandan government debt will rise over the
coming years as the authorities engage in an ambitious infrastructure spending
programme. Although we believe that the increase in debt will be sustainable
given improvements in revenue generation, the emphasis on nonconcessional and
foreign currency-denominated debt will test the government's creditworthiness
over the coming years.
Uganda's
central bank will continue cutting the policy rate in the coming quarters in an
attempt to spur sluggish growth. Coupled with more benign inflation, as greater
shilling stability tempers imported price pressures, this underpins our view
that the Bank of Uganda will cut the policy rate to 11.0% by end-2017. Uganda's
current account deficit will widen to 10.1% of GDP in 2016, and 10.3% in 2017,
due to a ramp-up in capital imports for government infrastructure projects.
Meanwhile, weaker remittance and aid flows will weigh on the income account.
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more information Visit at: http://www.marketresearchreports.com/business-monitor-international/uganda-country-risk-report-q4-2016
The Permanent Court of Arbitration's ruling on the
Philippine arbitration case on July 12 will have wider implications for other
claimant countries in the South China Sea, particularly Vietnam, as the
conclusions that were drawn will help to set legal precedent for similar
maritime disputes in the region. We believe that Vietnam will likely stand to
benefit vis-à-vis China by using the ruling to clinch concessions from Beijing
as a counterbalance to nationalist domestic sentiment. We maintain our expectations
for the State Bank of Vietnam to lower its benchmark refinancing rate by a
relatively shallow 50 basis points to 6.00% by the end-2016 as a disappointing
GDP growth figure in Q116, subdued inflationary pressures and a relatively
stable currency will provide impetus for the central bank to act. However,
concerns over reigniting the housing bubble will likely temper the bank's
easing bent. We maintain our expectations for Vietnam's fiscal deficit to
remain largely unchanged at 6.1% of GDP in 2016, due to high recurrent
expenditure and debt repayment costs, as well as low oil-related revenue.
Beyond 2016, we forecast a gradual improvement in the government's fiscal
position owing to strong economic growth and reform efforts by the government.
However, we note that contingent liabilities and slow reform momentum from the
SOE and banking sectors could pose downside risks to fiscal consolidation
efforts and public debt sustainability.
Major
Forecast Changes
Due to a weaker-than-expected GDP growth performance
in H116, we have downgraded Vietnam's growth forecast to 5.9%, from 6.3%
previously. However, we expect growth to accelerate over the coming quarters,
spurred by a recovery in agricultural output as well as robust growth in the
industrial and services sectors. We expect the Vietnamese dong to maintain its
long-term depreciatory trajectory against the US dollar as inflation is likely
to average higher than the US, and the income account deficit is likely to
remain wide, acting as a persistent drag on the currency. However, we believe
that dong weakness over the shorter term is likely to be tempered by delays in
Fed rate hikes and regional foreign exchange strength. Accordingly, we have
upgraded our forecast for the dong to reach VND22,600 by end-2016 and VND23,200
by end-2017, versus our previous forecast of VND23,300/USD and VND24,000/USD,
respectively.
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more information Visit at: http://www.marketresearchreports.com/business-monitor-international/vietnam-country-risk-report-q4-2016
Zimbabwe
will record positive, albeit very mild, economic growth over the next two years
as an ongoing dollar shortage compounds the impact of adverse weather
conditions. The uncertainty surrounding the possibility of regime change will
mean prospects for a strong recovery remain slim before President Mugabe's
succession. An ongoing currency shortage and slow economic growth will continue
to weigh on public finances over the next two years. Some relief will come from
the government's efforts to re-establish relations with the IMF, allowing
access to much-needed credit from international lenders, but this will
nonetheless lead to some widening of the budget deficit. In the event of
de-dollarisation in Zimbabwe, high levels of inflation would make a return to
the economy, as weak balance of payments dynamics would see the new currency
sell off at a rapid rate. The Reserve Bank of Zimbabwe would accompany the process
with a series of interest rate hikes in a bid to temper price growth, but with
little effect. While Zimbabwe's current account deficit will narrow
significantly in 2016, this is a result of the country's chronic shortage of
foreign currency and lack of inward investment, rather than any improvement in
exports. Dynamics will improve slightly in 2017 as the economy sees some
recovery, but the external position will remain vulnerable to volatility in
investor sentiment. Increasingly vocal opposition to President Robert Mugabe
will add to pre-existing pressures surrounding the prospect of political
succession in Zimbabwe. The likelihood of a chaotic transition of power will
increase the risk of derailing the country's fragile economic recovery.
Major Forecast
Changes
We
have revised our expectations for the current account deficit and now
anticipate a smaller shortfall than previously, as weak demand and the ongoing
shortage of US dollars in the economy will limit imports.
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more information Visit at: http://www.marketresearchreports.com/business-monitor-international/zimbabwe-country-risk-report-q4-2016
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