Monthly No.

15/01 February 2015

Emerging Countries News

Editorial Brazil, at last!
Twenty-fourteen was a pretty bad year for Brazil. For Brazilians, the nadir was probably the
abject exit of their national soccer team during the Copa do Mundo. But Brazils economic
performance has been just as poor as its sporting record. The fourth quarter of 2014 will in all
likelihood be the third consecutive quarter of economic contraction, and over the full year,
growth should be virtually zero. That sluggishness notwithstanding, inflation remains a clear and
present threat, running very close to the top of the central banks target range, while external
deficits continue to widen. In 2014, for example, a trade deficit was recorded for the first time
since 2000, and the size of the current-account deficit is causing concern. Less surprisingly, the
public finances are running out of control. The primary deficit (before public debt interest
payments), which had helped Brazil to stabilise and then cut its public debt, vanished in 2014.
The Brazilian model has run out of steam.
Before Dilma Rousseffs October re-election, one of the main questions about her concerned
her ability to call a clearly inefficient economic policy into question. No doubt she tackled the
issue unenthusiastically, but she did finally put banker Joaquim Levy in charge at the Ministry
of Finance. (In fact, although he came from Bradesco, much of his career to date has been with
the IMF and in the upper echelons of Brazils public sector.)
Mr Levy wasted no time in setting out his priority, namely putting the public finances to rights.
This was unsurprising, as this had already been the main plank in the Plan Real economic
stabilisation plan implemented in the 1990s by Fernando Cardoso. And, by setting a target of a
return to a primary deficit of 1.2% of GDP from 2015 (in a continuing very low growth
environment), Mr Levy has already tackled the hard bits by, for example, calling into question
a number of absurdly generous components of the pensions system for public servants. He has
also announced an end to subsidies for electricity generating companies and a cut in the implicit
subsidies to companies borrowing from the BNDES public development bank. In 2015, we are
likely to see budget cuts and additional taxes.
The change of direction in economic policy is thus very real and, because the situation is
anything but desperate, a rebalancing of the public finances is, in our view, probable. That in
itself will not be enough to get the economy going
again (think of the manifest shortcomings of Highlights
transport infrastructure and the governance
The Czech Republic, Slovakia and Hungary
deficiencies (to put it politely) uncovered by the
all have strong growth prospects for 2015.
Petrobras scandal). But he had to start somewhere.
Russia is suffering a deficit of strategy and
confidence. The Central Bank of Egypt chan More emerging country details:
ges its monetary policy. A new devaluation of
Emerging Countries Prospects is also published
the CFA franc is unlikely South Korea is
in French, in a Friday weekly edition.
lagging. Is country risk being properly evaluated in Latin America?

Group Economic Research

http://economic-research.credit-agricole.com

February 2015 edition

Central and Eastern Europe, Central Asia

Czech Republic, Slovakia, Hungary Strong growth prospects for 2015

GDP growth in the Czech Republic and
Slovakia is forecast to come out at 2.4% in
each country in 2014. In Hungary, it is set to
top 3%. These are honourable performances
given the difficult European environment. The
three growth engines of household consumption, industrial production and investment are
pretty robust. After the austerity policies of
2012 and 2013, household consumption rose
2% in 2014 (slightly less in Hungary), fuelled
by falling unemployment in all three countries.
The upturn in industrial production, driven
mainly by the automotive industry, where new
registrations and exports have surged across
the region, is also favourable to growth. After
contracting sharply for two years, investment is
also picking up strongly once more. Performance of around +4% should be recorded in

the Czech Republic and Slovakia, and could be

as high as 12% in Hungary due to the launch
of several vast infrastructure projects.
%, y/y
6

Czech Republic, Slovakia , Hungary:

GDP growth

4
2
0
-2
-4
-6

Q1 10

Q1 11

Q1 12

Q1 13

Hungary
Czech Rep
Source: Eurostat, Crdit Agricole SA

Q1 14
Slovakia

Comment The outlook is good and upbeat for 2015, and GDP growth indicators should
remain on the same trend as in 2014, especially as regards the rise in investment and in
industrial production. GDP is thus forecast to grow 2.4% in Hungary a slight deceleration in
view of the rebound effect observed in 2014. Growth should come in at 2.5% in the Czech
Republic and at 2.8% in Slovakia, in line with past performance. The latter two countries
should use the opportunity of the upturn in activity to continue rebalancing their public
finances. Public debt levels should again fall in 2015, a trend already observed last year with
the ratio of debt to GDP running at 44% in the Czech Republic and at 55% in Slovakia. This
trend is contrary to that observed in almost all EU countries which, with the exception of
Germany, have seen their public debt to GDP ratios deteriorate significantly since the start of
the crisis. For Hungary, the next challenge is to avoid a further depreciation of the forint. The
Hungarian currencys exchange rate, after topping 320 to the euro in mid-January, has since
improved to 312. While exchange rate variations are no longer penalising lending to
individuals, as they are now denominated in forints, public debt, 39% of which is in foreign
currencies, could still be affected by the exchange rate.

Central Europe Swiss franc appreciation

adversely affects Poland and Croatia. The
Swiss National Bank decided not to try and
contain upward pressure on its currency any
longer and allowed the Swiss franc to appreciate by 16% against the euro on 15 January.
The rise also concerns most Central European
currencies, which are pegged to the euro.
Polands WIG stock market index dropped 5%,
dragged down by plummeting bank stocks.
Comment Effectively, it is above all
Polish and Croatian borrowers who took on
debt in Swiss francs that will suffer most
from the depreciation of their currencies
against the Swiss franc. The higher cost of
their borrowing will put those with the
highest debt in difficulty and trigger an
increase in banks doubtful loans. The
banks should have the resources to cope
with this. Hungary has managed to escape
the trend as it was protected by last

Novembers decision to convert foreign

currency loans into forints.
Baltic states The roubles fall will also
affect economies. The Baltic states, the countries most affected by EU sanctions against
Russia and its export embargo, in particular on
foodstuffs, will also suffer in 2015 from the 44%
drop in the rouble against the euro over the
past 12 months. The rising cost of exports is
likely to affect trading relations with CIS partner
countries.
Comment Overall, the growth deficit is
almost certain to be greater in 2015 than the
recorded 2014 shortfall, when the effects
only began to be felt in the second half. If the
difference is greater than 0.5%, it is still
unlikely to push GDP growth below 2.5% in
each of the three Baltic states.

-2 -

February 2015 edition

Russia A deficit of strategy and confidence

Everything is contributing to undermining the
Russian currency, including the resumption
of hostilities, and with it the idea that
sanctions will continue. This explains the
resurgence of a substantial political risk
premium on Russia, and the considerable
volatility of investor reactions. Geopolitical
risk is a new object on European soil, with
markets finding it difficult to measure its
implications and limits. This crisis has
consistently thrown them and uncertainty is
never neutral: it impacts on expectations,
which at that point become highly binary.
Thus, the markets took some time to move in
2014, but since then have over-reacted to the
slightest item of news. The business climate
is also having a depressing effect on the
rouble with the assumption of a recession in
2015 (-5%), and above all, tremendous
disappointment as regards the mid-term
growth trajectory. High inflation, running at
11.5% in December, will adversely affect
consumption, which will worry investors who
took advantage of growth based on
household demand (think of the automotive
sector, or mass retailing, etc.). The banking
sector, for its part, is fragile and the
dollarisation process is accelerating. The oil
price is also dragging the currency down.

point to a monetary emergency, show just

how far the Russian authorities are caught up
in the contradictions of deflation.
The Standard and Poors downgrade is a
further signal, and Russia has now lost its
Investment Grade status. Whats more, we
should expect several more downgrades
because a drop in the ratings is often selffulfilling: it impacts spreads and by the same
token, solvency. Even if this does not
constitute a threat, because public debt
levels are low, the defence of the rouble and
the recession are having an adverse impact
on Russias foreign currency reserves,
regarding which it is difficult to know how
much of them can be mobilised (S&P has
estimated them at 7 months imports but says
they could be down to 3 months as early as
2017). Fortunately, external debt fell by
USD130 billion in 2014, to USD600 billion.
Standard and Poors forecasts
GDP (%)
GDP at PPP (USD)
CPI (end of period)
Current account (% GDP)

2014

2015

2016

0.7

-2.6

1.9

13,194

8,605

9,376

7.8

13.5

6.5

1.1

2.6

In view of this, the central banks action

seems derisory and the high rates, which
Comment In fact, apart from the geopolitical risk, the major risk does not seem, in our
view, to be solvency. The most worrying symptom is to be seen in capital flight (USD152
billion in 2014), and in household confidence as savers try to shift their savings out of the
country. This was the mechanism that gave the 2008 crisis its systemic character. The
question of confidence will thus be major in 2015. And for that, the government needs a crisis
exit strategy. This is not the case, however, or at least no such strategy is visible, and this is
the most alarming aspect. If confidence is not restored, the question of political risk will soon
raise its head: a strategy based on popularity, itself based on nationalism, has its limitations,
in the face of an economic crisis that is worsening all the time.

Turkey Cautiously optimistic. The Turkish economys ability to rebound always takes the markets by surprise. They are,
therefore, observing the upward reversal of
activity indicators with interest, raising hopes
of a 3% rise in GDP in Q4, compared with
1.7% in Q3, and overall growth of 3% in
2014. Inflation is down, at 8.2%, and expectations are for a rate of 6.5-7% for end 2015.
Comment Supply-side indicators are
looking good, but we should be wary of
the
demand
side,
as
consumer
confidence has been undermined by the
currencys volatility. In truth, the currency

should benefit from the drop in the oil

price, which should help cut the current
account deficit, the countrys real Achilles
heel, more quickly than expected.
Will that absorb the currencys structural
volatility? Not necessarily, because while
the deficit may not be as big, financing is
also dearer and more difficult to obtain,
and the problem of rolling over large
amounts of short-term debt is far from
being resolved, as a result.

-3 -

February 2015 edition

North Africa, Middle East

Egypt Central Bank of Egypt changes its monetary policy

The visibility of the Central Bank of Egypts
(CBE) monetary policy has been low since
2013. In February 2011, it had gambled on a
rapid political transition and for that reason
mobilised its foreign currency reserves on a
massive scale in order to keep the Egyptian
pound stable against the dollar. It also
maintained currency convertibility. At that
time, the most important thing was to
safeguard the confidence of foreign investors
who, a year earlier, had injected over USD10
billion into the economy. But as the political
transition continued beyond 2011, the CBE
had already used up 60% of its foreign
currency reserves. At that point, it had to put
capital controls in place, some of them formal
(limiting the amounts of foreign currency
available), others informal, such as delays in
repatriating dividends. In late December
2012, it maintained exchange rate stability
but carried out a surprise, 7%, devaluation.
Then in 2013, at a time when the country
was mired in extensive political unrest with
the fall of President Morsi, it embarked on a
controlled EGP/USD depreciation of 4% over
the course of the year. Control over the
exchange rate was made possible by the
inflow of foreign aid as of summer 2013. In

line with this, it depreciated EGP against

USD by less than 3% in 2014, before
keeping the pound at a fixed parity for the
last seven months of the year a policy that
is difficult to understand unless it was to lock
in expectations of an onward march towards
greater stability. In late 2014 the foreign
exchange issue was still one of the major
areas of uncertainty for investors: what would
the governments currency depreciation
policy be, going forward? The pound is
overvalued, it is true, and its objective value
should be close to 8 EGP/USD. But would
the CBE continue to hold it stable in order to
boost the confidence of investors who were
still in a wait-and-see pattern? In early 2015,
the CBE answered the question when it
announced a new monetary policy that
makes the exchange rate more flexible
following a surprise 2.5% devaluation of the
pound. The banks will now be able to
exchange pounds for other currencies at a
rate between +10bp and -10bp around the
rate offered by the CBE. On 28 January, it
auctioned USD40 million at a rate of
7.46 EGP/USD, opening up a corridor of
between 7.36 and 7.56 EGP/USD.

Comment The CBE refused an excessively strong devaluation of the exchange rate
despite the rise in the countrys current account deficit, among other things, so as not to
worsen the record budget deficit (-13% of GDP on average in 2012 and 2013) and to avoid
importing more inflation. The announcement of a more flexible exchange rate policy may
herald a more cautious fiscal policy and spending cuts on subsidies on imported goods.
Which means a more sustainable fiscal policy at a time when public debt was running at 93%
of GDP in 2014. We were forecasting an exchange rate of close to 7.50 by end-2015, but it
now seems that the EGP/USD rate could move closer to the black market rate of 7.80 in
2015. Without doubt, the drop in the oil price has eased fiscal and financial constraints,
allowing the government greater flexibility. We should also note that the lower exchange rate
encourages consumption and investment in the stock market (running at a 7-year high) and in
construction, whereas the scope for converting large amounts into foreign currencies to guard
against a devaluation is limited.

Tunisia The financial dividends of the

recent elections. Since 2011, Tunisias
foreign currency financing requirement has
increased from close to USD2 billion a year
to over USD3.5 billion a year. And since the
fall of Zine El-Abidine Ben Ali, bond issues
on international markets have been partly
backed by the United States and Japan. The
unassisted issue brought on 27 January was
feverishly awaited as the countrys credit
rating had been severely downgraded, from
BBB- in 2011 to BB- in 2014 for Fitch.

Comment Tunisia was asking for

USD 500 million, but demand hit
USD4.3 billion, taking the coupon down to
5.75% over ten years less than on the
domestic market. Almost all the 100
institutional investors attending the road
show subscribed to the bond. Following
this issue, the countrys requirements
have been cut and planned loans from the
IMF, the World Bank and a sukuk issue
should meet Tunisias external needs in
2015.

-4 -

February 2015 edition

Sub-Saharan Africa

CFA Zone The new devaluation of the CFA franc

On 11 January 1994, the 50% devaluation of
the CFA franc (FCFA) against the French
franc sent massive shockwaves across the
thirteen countries of West and Central Africa
using the currency. From one day to the next,
GDPs were almost halved, whereas import
prices, including those of many essentials,
were doubled. It was a major shock, but
prices soon stabilised (partly due to shrinking
demand), and the devaluation did ensure a
certain competitiveness for local products
food products in particular. Since then there
have been frequent rumours of a new
devaluation. Recently, in September 2014,
the Cte dIvoire Minister of Finance
expressed a desire for greater flexibility.

CFA Zone: GDP 2014

Cte d'Ivoire
Cameroon
Gabon
Senegal
Chad
Guinea
Congo
Burkina-F.
Mali
Benin
Niger
Togo
Central Afr. Rep.
Guinea Bis.
Sources: IMF, EIU

Mds

10

15

20

25

30

Comment We do not believe that a further devaluation of the FCFA is imminent or even
likely in the mid-term (out to 3-5 years). There are a number of reasons why. For one thing,
countries in the currency zone do not all have the same interests at the same time (especially
oil-producing countries vs. non-oil producing countries). A greater flexibility could result in a
break-up of the CFA zone, which nobody wants. Most analysts reckon, on the contrary, that
greater regional integration is a pre-requisite for sustained growth. In addition, we are not at
all in the same situation today as in 1994, when obvious over-valuation had led to serious
distortion, including an excessive propensity to import and massive external deficits. The IMF,
which prompted the devaluation in 1994, does not seem particularly aggressive in this
respect right now. Moreover, the accelerated fall in the independent currencies such as the
Ghanaian Cedi and the Nigerian Naira in recent months is not doing much to encourage
flexibility. Last, the current depreciation of the euro, to which the CFA is pegged via a fixed
parity, further reduces any incentive to devalue.

Nigeria and Angola The economies

most affected by the drop in oil prices.
Between 2014 and 2015, GDP growth could
drop from 4% to 1.7% in Angola and from 6%
to 4% in Nigeria. The situation in Angola
could be especially difficult as there are fears
of disappointment about oil output levels (just
as new oilfields are coming on stream) and
as the country will not be able to offset the
price effect by a volume-driven reaction. The
countries budget deficits and external
accounts will be very high, at around a
minimum of 10% each, which will obviously,
and in very short order, drag their ratings
down, even if their debt levels are still
manageable.
Comment Other non-oil producing
countries in the region will be affected by
the drop in commodity prices, including
Zambia, Ghana, and Namibia. As regards
countries that should benefit from this
situation, caution is necessary, especially

with South Africa, as the impact on growth

could be limited by supply-side problems,
specific to the country itself, such as poor
infrastructure and electricity shortages.
The same goes for the impact on external
accounts, which should remain limited
due to the scale of essential imports in
spheres such as infrastructure or
consumer goods.
This analysis is, in fact, valid for many
other emerging countries. The oil effect is
far more rapidly sensitive on the downside
than on the upside, as the growth stimulus
effects are limited by all the structural
limitations affecting these countries
except in the realm of prices: so far, the
only certainty for 2015 is that inflation
should fall in most countries.

-5 -

February 2015 edition

Asia

South Korea Flagging

GDP growth slowed to 2.8% y/y in the last
quarter of 2014, compared with 3.3% in the
previous one, continuing a downtrend that
began nine months earlier.

%
20

South Korea : contribution

to GDP growth

15

10

Due to domestic demand to the contrary,

the contribution to growth of net external
demand had increased.

5
0
-5

While public and private consumption only

very slightly marked time, this was not the
case with investment, which grew by a small
1.1%, whereas it had risen by 3.3% in the
third quarter.

-10
Q1 2010 Q1 2011 Q1 2012 Q1 2013 Q1 2014 Q1 2015
imports of g&s
stocks
public consumption
GDP

exports of g&s
investment
householf consumption
Source: BoK

Comment Close to bottoming? The strengthening of the US economy (and of US

demand), plus the monetary easing implemented by the central bank in the second half of
2014, with a 50bp cut in the key rate, together with the relative resilience of the labour
market, due in particular to a drop in unemployment in the 20-29 age group last year, all point
to a yes.
That yes should certainly be qualified, however, due to the fact that the slowdown in China
(which absorbs a quarter of South Korean exports) is expected to continue this year. Then
there is increased competition from Japan, largely as a side effect of the wons appreciation
against the yen over the past two years. Not to mention fears that the ECBs QE could trigger
massive capital inflows and push the won even higher, adversely impacting (a bit more)
South Koreas price competitiveness.
Then again, the explanation for last years slowdown lies not only in cyclical but also in
structural factors. In this respect, it also raises the question of growth potential. Down? Is
South Korea at a turning point? The fact is that reforms are necessary, but, as so often, are
difficult to swallow. Last weeks cabinet reshuffle (after that of last June) testifies to this.
Hence a (current) forecast for stable GDP growth of around 3.5% through 2015, assuming an
improvement during the year, starting from the current level. But an improvement under
constraints and a growth outlook with a downside risk

China Defenders of workers' rights

exposed to growing intimidation. Police
arrests and detention without charge, pressures on the entourage, accusations of
unpaid debts, physical attacks... The methods reported by these activists are multiple.
And one of them to say repression last year
was some of the toughest in history, before
to add 2015 is going to be even tougher.
Comment Although the number of
jobs created last year was satisfactory (on
paper, at least), labour market conditions
nevertheless seem to have deteriorated.
There is an increase in relocations into
the inner country (to cope with rising
production costs), often without any appropriate compensation for workers.
There is also this transition to a service

economy, which means more precarious

jobs and a demand for qualifications
which cannot be met by all the current
workers
Hence the number of strikes in 2014,
running at close to 1,400 double the
previous year. In short, the environment is
conducive to social unrest, to which intimidating activists defending worker rights
is a possible response, but which Beijing
also tries to counter by a policy for a more
inclusive growth

More information:
clairages mergents
Edition January 30, 2015:
China: What if growth slows to 5%?

-6 -

February 2015 edition

Latin America

Latin America Is the price of country risk being properly evaluated?

The cost of sovereign risk as measured by
prices for 5-year Credit Default Swaps (CDS)
has moved in some surprising directions in
recent months, quite apart from its general
uptrend. For example, the spread between
Brazilian and Mexican CDS, which was just
over 70 points in mid-2014, hit 120 points in
mid-December, before narrowing to 95 points
in the past few days. Columbian and
Peruvian CDS, which were very close until
early December, have diverged, with
Peruvian risk now being priced below that of
Columbian. Perhaps even more surprisingly,
Chilean CDS, which in early 2010 were
priced at 70 points above Mexicos, currently
present a spread of under 10 points.
Question is: do these changes reflect
changes in relative risk, or are they only
market fluctuations likely to be corrected in
the near term?

240

5-year CDS
bp

210

180
150
120
90
60
30

0
juil.-14
Brazil
Peru

oct.-14
Mexico
Chile

janv.-15
Colombia

Source: Thomson Reuters

Comment We lean towards the second answer: the relative change in CDS in the region
in recent months does not in our view perfectly reflect the relative shifts in sovereign risk.
Mexicos fundamentals are effectively better than Brazils. For example, the ratio of public
debt to GDP in Brazil is 60%, compared with Mexicos 33%. These better fundamentals are
taken into account in the reports published by the rating agencies (BBB- as against BBB+ for
S&P) and in our internal credit ratings. But is this a good enough reason to remunerate an
insurance policy on Brazilian sovereign risk out to five years at almost 1% more than the
same guarantee for Mexico? We do not think so.
The relative shifts among the Andean countries are even more surprising. If the 70-point
spread between Chile and Mexico five years ago may have seemed excessive, current
prices, which no longer differentiate a country which, despite its very real problems such as
its dependence on commodities and social inequalities, is indisputably more advanced and
more stable than Mexico, do not seem logical to us. And we understand even less the shifts
relative to Colombia and Peru, with their current spread of 32 points. Peru is better rated by
the agencies than Colombia due to its healthier public finances (its public debt ratio is 20%
compared with Colombias 37%), but we persist in thinking that political risk and hence midterm risk, is smaller in Colombia than in Peru.

Mexico A genuine industrial recovery at

last? In November, Mexicos industrial
production was up 2.4% y/y. It still lags well
behind that of the United States, to which it is
usually strongly linked: at year-end, the
growth rate in US industrial production was
close to 5% y/y. But it is now moving in the
right direction in Mexico, notably as concerns
manufacturing production, up 5.3% y/y in
November). In 2015, the manufacturing
sector, where auto manufacturing is the most
dynamic segment, should continue to benefit
from strong US demand for vehicles. The
construction sector trails behind, but is in
much better health than in 2013, when it was
contracting sharply. The mining sector is

down, with oil output stagnant and copper

production falling.
7

Manufacturing production
%, y/y

6
5
4

3
2
1
0
-1
janv.-11

janv.-12

Sources: INEGI, Fed

janv.-13
Mexico

janv.-14
USA

-7 -

February 2015 edition

Trends to watch
Spreads on sovereign issues
650
600

Emerging country currencies

110

bp

/USD

100

550
500

90

450

80

400
350

70

300

60

250
200

50

150
Jan-14

40
Jan-14
Apr-14
Jul-14
Brazilia - Real
India - Rupee
South Africa - Rand

Apr-14
Africa

Jul-14

Oct-14
Latin America

Asia

Central Europe
Source: JP Morgan

Middle East

startof priod = 100

Cost of freight

Oct-14
Russia - Ruble
China - Yuan
Source: WM/Reuters

Oil
120

2000
USD/pts

110

USD/
barrel

100

1500

90
80
70

1000

60
Brent
WTI

50
500
Jan-14

Apr-14

Jul-14

40
Jan-14
Apr-14
Jul-14
Source: ICIS Pricing, Thomson Reuters

Oct-14
Baltic dry index

Source: Baltic Exchange

Baltic dry index: the benchmark index for moving major

raw materials by sea.

Brent: North Sea oil, the benchmark quality for setting

crude oil prices.
WTI - West Texas Intermediate: (another) benchmark
quality for setting crude oil prices.

Metals

Agriculture

160

7600

USD/M t

Oct-14

USD/M t

460

USD/
bushel

USD/pts
440

7200

140

420

6800
120
6400

400

100
6000
80

60
Jan-14

380
5
360

5600
5200
Apr-14

Jul-14

Oct-14
Iron ore in China
Source: Steel Home, LME
Copper (rhs)
nd
rd
Iron ore: Brazil and India = 2 and 3 biggest exporters
worldwide, and a good indicator for tracking Chinese
demand for and output of steel.
Copper: benchmark metal.

4
Jan-14

340
Apr-14

Jul-14

Oct-14

Source: USDA,
CRB

SRW wheat
CRB foodstuffs index (rhs)
SRW: Kansas City Soft Red Winter Wheat, the benchmark
quality for setting the price of wheat.
CRB foodstuffs index: a synthetic index of prices for ten
food products calculated by the Commodity Research
Bureau.

-8 -

February 2015 edition

Crdit Agricole Group economic forecasts

Real GDP (YoY. %)

Last update:
28-Jan-15

2014

2015

CPI (YoY. %)

2016

2014

2015

Current Account (% GDP)

2016

2014

2015

2016

USA

2.4

3.2

2.8

1.6

-0.1

2.0

-2.3

-2.4

-2.4

JAPAN

0.1

1.3

1.5

2.7

1.5

1.2

0.3

0.9

1.0

EUROZONE

0.9

1.0

1.5

0.5

0.3

1.2

2.5

2.3

2.2

Asia

6.0

6.1

6.1

3.3

3.6

3.6

2.1

1.3

0.9

China

7.4

7.1

6.9

2.1

2.4

2.8

2.1

1.1

0.5

Hong Kong

2.3

3.1

2.8

4.4

3.8

3.8

1.4

1.1

0.8

India

5.5

6.0

6.3

6.7

6.5

6.2

-2.1

-3.0

-3.0

Indonesia

5.1

5.6

6.0

6.4

7.6

5.3

-2.9

-2.5

-2.1

Korea

3.5

3.5

3.4

1.7

1.9

2.1

6.3

5.9

5.5

Malaysia

5.9

5.5

5.5

3.1

4.4

3.1

5.3

4.8

4.4

Philippines

5.9

6.2

7.0

4.3

3.5

3.5

4.1

3.8

3.5

Singapore

2.8

3.7

3.4

1.1

2.0

2.5

19.4

19.1

18.5

Taiw an

3.4

3.3

3.2

1.3

1.8

2.2

13.2

12.8

12.2

Thailand

0.9

4.0

4.0

2.0

2.7

2.6

3.0

2.0

1.5

Vietnam

5.7

5.7

6.0

4.2

3.5

4.1

4.0

3.5

3.0

Latin Am erica

0.7

1.7

3.0

7.9

6.9

7.4

-2.5

-2.7

-2.4

Argentina

-0.5

1.0

3.1

24.0

17.0

21.4

-1.0

-1.2

-0.2

Brazil

0.0

0.9

2.4

6.4

6.5

6.4

-3.4

-3.4

-3.5

Mexico

2.0

3.2

3.7

3.8

3.6

3.4

-1.8

-2.2

-1.8

Em erging Europe

1.8

-0.8

2.5

5.6

7.6

5.6

0.1

0.7

-0.1

Czech Republic

2.5

2.5

2.8

0.4

1.2

2.0

0.0

0.2

0.5

Hungary

3.3

2.5

3.0

-0.1

2.0

2.8

3.3

3.5

3.3

Poland

3.3

3.1

3.5

0.0

0.3

1.5

-1.9

-2.2

-2.5

Russia

0.6

-5.0

1.5

7.7

12.0

7.0

3.0

4.5

3.0

Rom ania

2.1

2.8

3.0

1.1

1.7

2.5

-1.2

-1.6

-1.9

Turkey

3.1

3.5

3.8

8.9

7.2

8.0

-5.4

-6.0

-6.0

2.9

3.4

3.5

4.9

5.1

5.1

4.2

1.8

0.6

Algeria

2.8

3.0

3.3

2.5

4.0

4.2

-1.0

-2.0

-3.0

Egypt

2.2

3.5

3.9

10.5

10.5

8.3

-2.5

-3.0

-2.2

Kuw ait

2.2

2.0

2.0

3.4

4.0

4.1

36.2

33.0

30.9

Lebanon

2.0

2.5

3.4

3.0

3.5

3.7

-8.5

-8.0

-8.1

Morocco

2.4

3.5

4.0

0.4

1.0

1.7

-6.8

-5.7

-5.3

Qatar

6.4

6.5

5.5

3.7

4.2

4.5

15.8

7.5

5.5

Saudi Arabia

4.0

4.0

3.8

2.9

3.5

4.4

13.1

5.7

3.4

South Africa

1.3

2.1

2.3

6.1

5.2

6.0

-5.5

-4.3

-5.3

United Arab Em irates

4.5

4.5

3.7

2.5

3.0

3.0

12.2

9.0

4.5

Tunisia

2.3

3.0

3.6

5.8

5.2

4.4

-9.3

-9.0

-8.4

Total

2.9

3.1

3.4

2.8

2.4

3.0

0.4

0.1

-0.1

Industrialised countries

1.7

2.2

2.1

1.4

0.5

1.6

-0.4

-0.4

-0.4

Em erging countries

4.4

4.2

4.9

4.4

4.8

4.6

1.4

0.7

0.3

Africa & Middle East

Notes:
(1) CPI for UK: HICP; for Brazil: IPCA
(2) For India: Fiscal year ending in March.

You can consult our forecasts on our website,

Economic Research, Forecasts Prospects page

Completed on 2 February 2015

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February 2015 edition

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