Each week Frontier Strategy Group’s global team shares their view on key media stories, and what the implications are for businesses that operate in emerging markets. For more information about how to contact our analysts, send us an email.
Alex Schober on “The average Argentine salary growth has been 12.5 percentage points lower than inflation in the last 12 months“
“INDEC published August monthly salary data yesterday which showed a nominal increase of 2.8%, which is less than the monthly inflation reading of 3.9%. Overall, 12-month inflation ending in August was 12.5 percentage points higher than 12-month salary gains, showing a major loss in disposable income. FSG doesn’t expect real wages to grow consistently until Q2 2019.“
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Mark McNamee on “Russia Imposes Financial Sanctions On 322 Members Of Ukrainian Elite, 68 Entities“
“These sanctions seem like a miscalculation by Russia, with no real gain and only further pushing Kiev away from Russia and into the West’s arms. The impact on Ukraine’s economy is negligible as Kiev has oriented to the West: exports to Russia have collapsed since the Maidan while exports to the EU are now 40% of its exports. Remittances from Russia have fallen; those from the EU are now 10% of GDP.“
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Josef Jelinek on “China factory growth weakest in over two years, slump in export orders deepens”
“China’s official manufacturing PMI for October has come in at its lowest level since July 2016. New export orders, an indicator of future activity, contracted for a fifth straight month and at the fastest pace in at least a year. The suggestion is that the boost to China’s exports by firms front-loading their orders to beat US tariff deadlines will fade sharply.“
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Athanasia Kokkinogeni on “Hopes rise of UK-EU financial service deal“
“MNCs should interpret recent news about guarantees for the financial services as positive for the progress in Brexit negotiations, but should continue to work on their No Deal Brexit plans in case a downside plays out in negotiations. The EU and the UK are moving towards an agreement on the Irish backstop, and want to safeguard EU-UK financial trade to mitigate market concerns ahead of March 2019.“
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Pratima Singh on “Doing Business 2019: India Jumps 23 Places On World Bank’s Ease Of Doing Business Index“
“The Indian government has prioritized improving the country’s ranking in various international benchmarks by implementing critical reform and simplifying regulatory processes to attract investment and drive economic growth. The improvements in the World Bank and the World Economic Forum rankings are big wins for PM Modi as he hopes to increase popular support before the 2019 national elections.“
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Martin Belchev on “Toyota to build new hybrid car plant in Poland“
“Toyota will invest around EUR 1.1 bln in a new hybrid car manufacturing plan in Poland. Other markets in the region have also recently benefited from increased investments in the automotive sector, indicating the attractiveness of the region. However, while these will present some new B2B opportunities, MNCs should note that industrial production will be milder in 2019 as external demand softens.“
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Ramiro Sugranes on “How are political parties reacting to expanding the VAT for the basic family basket?“
“Colombia’s government’s recently proposed tax reform has already begun to face significant backlash, especially for the most unpopular measure—expanding the base of basic goods that must face value-added taxes (VATs). MNCs should expect this to translate into likely revisions as congressional debates regarding this reform progress, while the government aims to finance its pressing fiscal gap.“
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