Sudan’s president is running out of carrots and sticks
The lifting of United States sanctions on Sudan is a necessary but not sufficient condition for the country’s economic recovery. To achieve that, President Omar al-Bashir must strike a tricky balance between economic reforms, political openness, internal stability and international goodwill. These preconditions, however, may clash with his political ambitions.
The Swiss franc 2.0
The Swiss economy is doing remarkably well. Though it is growing only slowly, its companies are competitive, unemployment is virtually absent, inflation is close to zero and public debt is under control. One would therefore expect the Swiss National Bank to abstain from taking an active role in monetary policy or manipulating interest rates and exchange rates. Yet, last June the SNB announced that it intends to play an active role, and that it will expand its money supply to enhance growth and avoid deflation. These explanations are not convincing – the key is somewhere else: bruised Swiss manufacturers.
Global Outlook 2017: Venezuela
Venezuela is back from the brink. Over the past six months, Nicolas Maduro has outsmarted the opposition, used a bond swap to stave off default, and coopted the top military brass to prevent a coup. If the president can only find a way to revive oil output, he may be a good bet to stay in office through 2018.
Global Outlook 2017: Scenarios for the economy
The world economy in 2017 will be defined by four variables: growth, oil prices, inflation and interest rates. Political events could also play an important role, especially a possible rapprochement between the United States and Russia and general elections in France. The potentially fateful impact of the latter on the European Union would be amplified by an Italian crisis.
Loose monetary policy could be on its way out
In March, the United States Federal Reserve kept its main interest rate on hold, while the European Central Bank cut its main interest rate to zero. The moves confirmed what investors already knew: the American and European economies still have plenty of weaknesses. But despite appearances, the Fed and the ECB are on track to end their expansionary monetary policie...
As sanctions take their toll, Russia turns to import substitution
As the Russian economy’s difficulties deepen, the Kremlin is putting a brave face on things. It maintains that Western sanctions have been beneficial and that its own anti-crisis program is working. Moreover, the government is talking up a new “Strategy 2030” to boost domestic self-sufficiency based on import substitution. The new measures, however, are unlikely to...
Argentina’s new government makes an ambitious start
President Mauricio Macri of Argentina, who was elected last October, has quickly set out to show how much his administration differs from that of his predecessor, Cristina Fernandez de Kirchner. Much of the attention has focused on its determination to end the country’s complex set of price controls, subsidies and exchange rate restrictions. But his most significan...
Europe weighs its options to deal with troubled banks
European banks are in bad shape, and shareholders and bondholders are feeling the heat. With governments and regulators still groping for a solution, various options have bubbled to the surface. Summary <i>Three main responses have been proposed to Europe’s banking crisis: 1) more stringent regulation and ...
Fed-engineered recession may speed dollar bloc’s collapse
The year has not started well for global financial markets. Undoubtedly, one reason that stocks have slumped is that the United States Federal Reserve under Janet Yellen has started to raise interest rates and signaled that more hikes are coming. The hawkish stance of Ms. Yellen’s Fed not only risks derailing the U.S. eco...