INVESTMENTS IN EMERGING MARKETS

GBUS 448
Global Markets Report
27 November 1 December 2017

LATAM Editor: EMEA Editor: ASIA Editor: Global Editor:

Giulia Martins Olivia Rockwell Gregory Bernstein Katrina Knisely

Highlights
LATAM:
Brazils economy in Q3 grows 1.4% year-on-year, slightly above forecast 1.3%.
Chiles economy in Q3 grows 2.2% YoY, matching market expectations.
Colombias central bank cuts interest rate 25 basis points to 4.75%, surprising markets.
Mexicos GDP growth in Q3 slows to 1.5% YoY, slightly below forecast of 1.6%.
Peru reaches lowest inflation level since May 2010 with 1.54% YoY change in consumer prices.

EMEA:
Egypt posts strong economic indicators this quarter, including 5.2% GDP growth YoY.
Greece completes successful 30-billion-euro debt swap, sets stage for return to capital
markets.
Poland defies European Commission with proposed changes to judiciary
OPEC and Russias 9-month oil production cut extension pushes Brent above $64 per barrel.
South Africas debt rating is cut to junk status by S&P amid ongoing political turmoil.
Turkey granted license to begin accepting deposits from Chinas 3rd largest bank in January.

ASIA:
China announces new interest rate controls as EU removes it from nonmarket economies
list.
India approaches budgeted fiscal deficit while Q2 growth rate ticks back up to 6.3% YoY.
Indonesias inflation falls to 3.3% in November, hitting an 11-month low below expectations.
Malaysias ringgit continues to strengthen but will face headwinds in 2018.
South Korean central bank surprises with 25 bps interest rate increase to 1.5%.
Taiwans market share hits twenty-seven year high due to reliance on tech stocks.
Thailands investment spending to increase 52% in 2018 as political parties probe alliances.
 BRAZIL
Country Analyst: Antonio Quintanilla
Economy shows positive growth for third consecutive quarter
Brazils economy is showing gradual signs of recovery with 1.4% YoY GDP
growth, above forecasts of 1.3%. Brazils third-quarter expansion of 0.1%while
minimal and below the forecast 0.3%makes this the third consecutive period
in which the economy has shown positive growth after a multi-year recession. The agricultural sector in
particular saw positive growth of 14.5% from the beginning of the year through the third quarter, while
manufacturing fell 0.9% and the services sector fell 0.2% during the same period. Year-to-date growth in
GDP stands at 0.6%, and analysts believe 1% growth for full-year 2017 is still feasible.

Financial Times, Trading Economics

Unemployment rate continues to decrease

The three months preceding October saw the unemployment rate continue decreasing to 12.2%. While
there was some improvement in the growth of formal sector jobs in October, the decrease in the
unemployment rate is mostly attributable to job growth in the informal sector. While this is good news
for the labor market, it is unlikely to lift inflation since the pace of job growth is quite modest.
Additionally, wage growth remained flat when adjusted for inflation. The implementation of the labor
reform in November, though expected to stimulate job growth, may also lead to minimal wage growth,
if any, due to the flexibility it gives employers.

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Trading Economics, Reuters

Economic activity beats expectations in September

Economic activity increased 0.4% month-over-month in September, higher than the expected 0.35%.
This increase comes after a 0.37% drop in August. However, the year-over-year rise was 1.30%, putting it
in line with market expectations. This rise is due in large part to a rebound in retail, which experienced a
0.5% month-over-month and 6.40% year-over-year rise in sales volumes in September. These results
validate the notion that the Brazilian economy is on a path toward a gradual recovery since
unemployment continues to decrease and income has slightly risen.

Reuters, Trading Economics

CHILE
Country Analyst: Chandler Payne

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Chilean economy grows 2.2% in third quarter
The Chilean economy grew 2.2% YoY in Q3 2017, matching market expectations. It marked the strongest
expansion since Q1 2016 as spending rose faster, exports rebounded, and investment fell less. Mining
activity rebounded prominently, growing at 7.5%.

Trading Economics

Piera and Guillier statistically tied in latest polls

The latest presidential election polls, released by Cadem-Plaza Pblica on 24 November and 1
December, show first-round winner Sebastin Piera (40.0%) leading runner-up Alejandro Guillier
(38.6%). Guillier, however, is within the margin of error, making the candidates statistically tied. Of note
is that Piera has picked up only 3.3 percentage points over his first-round result (36.7%), while Guillier
has picked up 15.9 (from 22.7%). In the first round on 19 November, former president and market-
favored candidate Piera significantly underperformed his polling numbers, causing the market to
correct 5.9% the following day. Cadem has noted it did not determine the correct profile of probable
first-round voters, underestimating the performance of surprise third-place finisher and leftist Beatriz
Snchez. This is likely the reason for the uptick in center-left Guilliers polling. The second round of
elections is set for 17 December.
Diario Financiero, Diario Financiero

Chilean stocks reach 4-month low on election results and China demand
The Chilean stock index (IPSA) reacted sharply (-5.9%) to market-preferred candidate Sebastin Pieras
closer-than-expected first round result on November 20, sinking to its lowest level since July. Although
the index rebounded slightly through the middle of the week, projections of weaker Chinese demand for
raw materials has caused Chilean mining and metals stocks to slide. As of 27 November, the index was
10.4% below its 31 October peak.

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Yahoo Finance, Diario Financiero, Bloomberg

COLOMBIA
Country Analyst: Rushika Shekhar
Central bank cuts interest rate 25 bps to 4.75%, surprising market
Five of seven Colombian Central Bank board members voted to cut the interest
rate 25 basis points to 4.75%. The move surprised market expectations and left
the interest rate at its lowest level since September 2015 amid better-than-
expected inflation and weak growth. It is now expected that more cuts may come to try and revive the
economy. The bank has also followed Chiles example, reducing the frequency of its policy decisions
from 12 to 8 per year, which gives board members more time to weigh changing indicators.

Bloomberg

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Crude oil production up, gas production down in October
Crude oil production increased 1.4% from September, reaching 863,853 barrels per day. On an annual
basis, Colombias oil output has risen 2% over October 2016 and remains above the 840,000 target set
by the governments medium-term fiscal plan. Gas production meanwhile reduced 0.49% from
September.
Markets Insider

OECD projects Colombias GDP will grow 3% in 20182019

The OECD has estimated that Colombias economy will grow 1.7% by the end of 2017 and has increased
GDP growth estimates for 2018 and 2019 to 3%. OECD cited as catalysts for growth the recent reduction
of a business tax, the peace agreement, and improving financial conditions. As inflation has started
stabilizing within target ranges, monetary policy is also expected to remain stable in the next few years.
Markets Insider

Unemployment down in October

Unemployment decreased in October to 8.5% from 9.2% in September. This is the lowest level since
November 2016 and down from a high of 11.7% in January 2017.

Trading Economics

Coffee as a dividend of peace: Nespresso investment cited as proof that peace deal is working
Nespresso has extended its relationship with Colombia, pledging a $50 million investment in high-quality
production in a previously conflict-prone region, Caqueta. President Juan Manuel Santos has cited the
investment of a sign that coffee will be a dividend of peace for the nation and the end of conflict will
open up opportunities for rural development in areas that were previously inaccessible to foreign
investment. The implementation and outputs of the peace deal have been rocky so far, but productivity
has seemed to be rising in some areas. Colombia is the worlds third-largest coffee producer and is well-
known for its more expensive Arabica varieties. Expanding coffee plantation to former conflict areas has
been a key growth strategy for the government, with some programs aiming to incentivize current coca
farmers to migrate to coffee.

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Bloomberg

MEXICO
Country Analyst: Jacob Haberman
If elected, Obrador vows stable economy and crackdown on financial crime
In a 415-page manifesto published last week, leftist presidential front-runner
Andres Manuel Lopez Obrador continued to outline his presidential platform
and sought to deflect accusations that he would pursue Venezuela-style socialist
policies if elected. He cited the need to boost infrastructure spending, guard economic stability,
postpone NAFTA negotiations until after the July election, and tighten money laundering, banking, and
tax regulations related to financial crime. Critics paint him as a challenge to Mexicos celebrated neo-
liberal movement, attacking his plan to scrap a $13 billion Mexico City airport project and the
privatization reforms currently underway in the energy sector.
Reuters, Reuters

New Banxico head committed to lowering inflation and relying on data

Alejandro Daz de Len this week replaced Agustin Carstens as the head of Banxico. In his first interview
as central bank chief, Daz de Len stressed Banxicos sole mandate of low and stable inflation and laid
out a cautious stance in describing inflations potential not to fall as forecast, citing currency pass-
through effects, relative monetary conditions vis--vis the U.S., and tightening dynamics in the labor
market. Inflationary dynamics have deteriorated over the last few months, prompting some to speculate
about future rate increases. Daz de Len noted this phenomenon, but pledged that the board will
remain data-dependent. He also stated that, despite currency volatility, the board does not have any
level or range predetermined for the exchange rate.
Reuters, Wall Street Journal, Reuters

Economic data affirm narrative of stability with a downside-biased growth profile

Recent economic data shows that, as expected, the Mexican economys growth rate slowed down in Q3,
primarily due to Septembers earthquakes. YoY GDP growth came in at 1.5%, slightly underwhelming
forecasts for 1.6% growth and last quarters reading of 1.8%. The finance ministry maintains its bullish
2017 full-year forecast range of 2.0%2.6%, while analysts at the IMF and private sector banks are more
conservative.

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 Annual GDP Growth Rate

September retail sales growth of -0.3% also largely confirms our view that high inflation and interest
rates are having real impacts on consumer purchasing power. The November Manufacturing Purchasing
Managers Index (PMI) had a strong reading of 52.40, in-line with our thesis for the potential upside for
manufacturing and investment through the end of the year and into 2018, after the confidence crisis
that hurt investment earlier this year.
Retail Sales Annual Growth

Reuters

Banxico Publishes October Credit Report, Showing Continued Slow-Down

High interest rates have also led to a deceleration in credit growth in the Mexican economy. Total bank
credit expanded 5.8% YoY in October. Notably, consumer credit grew by a mere 1.7%.

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Banxico

Finance Minister Jose Antonio Meade to seek PRI nomination

Last week, Finance Minister Meade resigned from his post in order to seek his partys presidential
nomination for the upcoming elections. To date, there has been little clarity on who will be the main
challengers to Obrador in July.
Reuters

PERU
Country Analyst: Giulia Martins
Peru reaches its lowest inflation level since May 2010
Inflation rate (YoY) in September was 1.54%, 50 bps below previous month
consumer prices. This was the lowest inflation rate since 2010. Consumer
prices decreased 0.2% when compared to October. The decrease in food and
beverage prices partially explain the decrease. After the floods in the first
semester of 2017, food and beverage prices in Peru rose significantly. However, as the country recovers
from the damages, prices have been falling. This month was the third consecutive month Peru
experienced a decrease of consumer prices on a monthly basis.

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Trading Economics, Reuters

Dollarization of Perus deposits and liquidity decreased in the past 12 months

The dollarization coefficient for liquidity decreased 3 percentage points to 33% in October 2017 from
36% in October 2016. Dollarized deposits also decreased 4 percentage points from 44% to 40% over the
same period. Corporate deposits, which the central bank has declared to be one of the main goals of the
de-dollarization efforts, went from 56% in 2016 to 51% this year.

Dollarization of deposits and liquidity (%)

Gestion

Perus stock market falls on decrease in gold prices and developments of Odebrecht investigations
Graa y Montero stocks keep falling as Odebrecht investigations develop. Four previous partners of
Odebrecht are current under investigation with pretrial custody hearing scheduled for Sunday morning.
The corruption scandal links not only Peruvian executives, but also Peruvian politicians to the massive
corruption scheme of the Brazilian company.

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On another front, the largest mineral company in Peru, Buenaventura, has experienced losses during the
past days due to a decline in gold prices. An increase in positive sentiment regarding the US economy
drove gold price down this week. Gold is Perus second largest export product; therefore, changes in the
commodity price directly affect Peruvian markets.

BVL Peru General Index

Bloomberg

Kitco, Gestion

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 Egypt
Country Analyst: Olivia Rockwell

Egypts economy grows 5.2%, budget deficit drops to 0.1% of GDP

GDP growth of 5.2% YoY is up compared to 3.4% in the same period last year,
according to Planning Minister Hala El Said. The government is targeting a
growth rate of 5%5.25% for Egypts full fiscal year, which ends 30 June 2018.
Last years primary budget deficit during the first quarter was 0.9%, and the overall budget deficit shrank
to 1.9% of GDP compared to 2.2% for the first quarter of fiscal year 2016/2017. It is also notable that
Egypt achieved a primary surplus of about 0.2% for the first time in years, and government revenue
grew 33% year-on-year, well above the 23% growth in expenditures during the same period.
Reuters, Enterprise Egypt

Central Bank of Egypt removes last remaining USD capital controls

Depositors for importers of non-essential goods since 2015 had been restricted to deposits of up to
$10,000 per day and $50,000 per month, and withdrawals were capped to $30,000. Strict foreign
exchange controls were first implemented after Mubaraks ouster in 2011, which had triggered a
massive capital outflow as investors pulled out of Egypt. The post-2011 restrictions limited foreign
transactions to $100,000 and were lifted in June 2017. CBEs announcement on 28 November removed
the last official foreign currency controls because the countrys foreign reserves have stabilized.

Bloomberg

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Egypts largest bank CIB signs $100 million subordinated loan agreement with IFC
The Commercial International Bank will receive a $100 million subordinated loan from the International
Finance Corporation (IFC) with a ten-year maturity date. This is part of an ongoing IFC investment
strategy to stimulate credit in Egypt, which will increase to $1.5 billion in 2018 from $1 billion in 2017.
CIB Enterprise Egypt

North Sinai Terrorist Attack

Despite a massive terrorist attack in the North Sinai on 24 November, markets were resilient
Suspected Islamic State militants bombed a Sufi mosque in el-Arish on 24 November, killing 305 and
injuring 128. The Egyptian government calls it one of the deadliest attacks in recent history. Markets
were closed Friday, but remained flat on Saturday following the attack, and the EGX, an index of the
exchange, rose 0.8% Sunday. Investors, local investors especially, have a thick skin when it comes to
attacks in the north Sinai, and seem to expect that it will remain unstable.
New York Times Bloomberg

Economy not likely to be affected by Sinai attack

Nor does the attack threaten the lending program from the IMF. Rather, the attack reinforces the need
for foreign assistance. Tourism numbers remained strong, as the location of recent attacks in North Sinai
is distant from the popular resort towns in the south. Short-term money market investors were not
affected, according to economists. These economists were also confident that it should not affect longer
term direct investment.
Reuters

Government to spend more on development in response

The Acting Prime Minister told local news sources that the government soon would break ground on
short-term development projects in the Sinai Peninsula, including four new cities in North Sinai. Further,
the government will give 1,500 Egyptian pounds ($85) per month to each of the attack victims families
as compensation. There is no expiration on these payments, and could last for generations.
Enterprise Egypt

Greece
Country Analyst: Friederike Kaiser
Greece completes 30-billion-euro debt swap, offer exceeds 86% take-up
Greece successfully completed a 30-billion-euro voluntary bond swap on
Wednesday, exchanging 20 bonds for new issues with maturities between 5 and
25 years, and interest rates from 3.544.2%. Take-up of the swap by bond-
holders hit 86%. Greece hopes this swap will improve market liquidity and ensure full market access
before the countrys planned bailout.
Financial Times, Reuters

Greece to return to capital markets in early 2018 with 7-year bond

The Financial Times reports that after its successful 30-billion-euro debt swap, Greece plans to return to
capital markets with a 7-year bond issue before its bailout exit next summer. If the issuance goes well,
the country plans to follow with one three-year and one 10-year issue by July. Greece aims to raise $6
billion to build its yield curve and cover financing needs for 2018.
Financial Times

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Greek banks to clear 20 billion euros of irretrievable NPLs
Greeces systemic banks have identified 20 billion euros in loansroughly one-fifth of all non-
performing loans (NPL)as irretrievable. These include loans made to businesses that have ceased
operations and whose equipment is worthless, loans made to freelancers who have left their profession,
loans of the long-term unemployed, as well as mortgage loans for properties that have significantly
decreased in value. Bank officials and monitoring authorities agree that dealing with these bad loans in a
sustainable fashion must remain a priority for lenders. Officials say that Greek banks will meet their NPL
reduction targets for 2017. The ratio of NPLs on Greek banks loan books was 107 billion euros, or 51%,
last year. Banks have agreed to bring that ratio down to 34%, around 67 billion euros, by 2019.
Ekathimerini, Reuters

Business and consumer confidence increase in Greece and across eurozone

Business and consumer confidence in Greece advanced in November. Consumer confidence increased to
-53.8 in November from -54.0 in October, while business confidence rose to 98.40 from 98.30 in the
same period. Positive growth and employment dynamics were also observed across the entire
eurozone. The eurozones aggregate economic sentiment tracked by the European Commission
increased for the sixth straight month, hitting 114.6 in November, a high not seen since 2000.

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 Eurozone economic sentime

Trading Economics, Trading Economics, New Europe

Poland
Country Analyst: Jackie Bakalarski
Polish parliament expected to rule to remove many Supreme Court judges
Polands right-wing Law and Justice party (PiS) on Thursday added two new laws
to its agenda that, if approved, would allow the government to remove an
estimated 40% of its Supreme Court judges, a move which some say is unconstitutional as it effectively
gives PiS control over the judicial system. These reforms will probably pass next week since in the PiSs
control over parliament means it can fast-track bills. If Poland proceeds, the European Commission has
threatened to apply Article 7 of the EU Treaty, which could lead to a loss of Polands EU voting rights.
Politico

PiS passes bill to phase out Sunday shopping by 2020

Polands PiS-controlled lower house on 24 November passed a bill to ban commercial activity on
Sundays, which was proposed by trade unions that want workers to have more time with their families
in alignment with PiSs Catholic values. The bill limits Sunday shopping to the first and last Sunday of the
month through 2018, only the last Sunday of the month in 2019, and bans it starting in 2020. However,
the ban does not extend to online shops and bakeries, and would provide some exceptions, such as for
major holidays like Christmas. The Senate and President Duda will also need to approve the bill.
The Register-Mail

Shale gas exploration in Poland comes to an end with exit of Irish firm, San Leon
For the time being, shale exploration does not look like it will continue in Poland. Irish firm San Leon
decided to return its 11 exploration licenses to the government amid persistently low oil prices, which
have sapped interest in natural gas, especially unconventional shale drilling. Twenty licenses remain
outstanding on the governments books for PGNIG, Orlen, Lotos and Shale Tech, but these investors are
either looking for oil or conventional gas reserves or have discontinued exploration work. The boom in
shale oil exploration and investment came in 20112013, inspired by the experience in the US. However,
three factors make its continuation in Poland unlikely at this time: the low price of oil, the challenging

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Polish geography, and the lack of sites compared to the US (only 72 versus hundreds in the US), which
reduces the economies of scale and increases the risk of not finding a viable site.
Emerging Europe

Economists warn that PiS policies could kill Polish growth

Leszek Balcerowicz is a former finance minister and deputy prime minister, and famous as the architect
of the country's early 1990s economic shock therapy that transitioned the economy from a Communist
anemic state into a growing economy. Now a professor and out of favor with the current administration,
he issued stern warnings against the current policies, saying growth in the EUwhich Poland is
benefiting from as an exporteris hiding the lack of investment in Poland and the overt spending by the
government. He has noted, The favorable economic situation left by the predecessors and the
economic upturn in the EU countries help to conceal these [economic] damages, but they will come out
eventually. Other economists are concerned about the same factors and watching the same trends,
including the tight labor market that is under pressure from low unemployment and high wage growth.
Poland did not have the same security net and entitlements that are in place in the rest of Europe, which
enabled it to grow more nimbly in the 1990s under a voluntary IMF growth plan. The state was
unencumbered by the high spending these programs require, but now they are adding such programs,
increasing public spending by 1.2% of economic output since 2015the highest level of spending in the
post-Communist period. With the lower retirement age taking effect soon, Polands spending will
increase further. In addition, Balcerowicz is concerned about PiS destabilizing the countrys institutions,
not focusing on increasing private sector foreign investment needed to grow in the long run, and not
incentivizing higher savings. It is only a matter of time before these flaws in the underlying fundamentals
affect Polands economic outlook.
Bloomberg

Russia
Country Analyst: Johnny Kim
OPEC and Russias 9-month oil production cut extension pushes Brent above $64
Brent crude, the international oil benchmark, jumped 2.4% to a three week high
of $64.32 per barrel on news that the worlds biggest oil producers successfully
signed to extend a deal to curb production by 1.8 million barrels throughout 2018.
The deal, led by Russia and Saudi Arabia,
was an effort to prop up prices above $60
per barrel in the medium-term. While high
oil prices would directly benefit Russias
public and private sector revenues, proper
implementation of the deal will prove crucial
in attaining the desired price range.

Financial Times Financial Times

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Lukoil sees 78% jump in Q3 profits year-on-year
According to Russias largest privately held oil producer Lukoil, net profits in the third quarter jumped
78% year-on-year, beating analyst estimates. Net profits rose to Rbs 97.3bn ($1.7bn) compared to
estimates of Rbs 91.2bn, while revenue increased an annual 13% to Rbs 1.48tn. These numbers were
driven mostly by the 7% jump in global oil prices compared to a year ago. According to the company,
other contributing factors included higher sales prices, higher gas production in Russia and Uzbekistan,
and decreased transportation expenses.

Financial Times

South Africa
Country Analyst: Arjun Krishnan

S&P cuts South African rand debt to junk

S&P Global Ratings downgraded South African rand debt to junk, which
reflects a further deterioration of the economic outlook and the nations
public finances. It also lowered the assessment on the countrys foreign-
current debt, already considered speculative, by one more step to the second-highest junk rating.
According to analysts, this reduction could mean that South Africa suffers as much as $2 billion of
outflows as a result of falling
out of the Barclays Global
Bond Index. Moodys kept
South Africas ratings on the
lowest investment grade on
th
November 24 , but placed
them on review for possible
downgrade within days. Should
Moodys cut, South Africas
rand debt may fall out of gauges
such as Citigroups World
Government Bond Index,
which could spur outflows

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reaching $7 billion.

Bloomberg
Zuma budget plan to deal with downgrades risks further damage
South Africas plan to cut spending and raise taxes to stave off further debt downgrades may have
unintended consequences that stunt the economic growth being demanded by ratings companies.
President Zuma stated his intention to cut spending by R25 billion ($1.8 billion) in next years budget and
find ways to add R15 billion to the nations revenue in ways that include, but are not limited to, tax
increases. Analysts and investment officers predict that any increase in taxes will have a dampening
effect on growth prospects. Finance Minister Gigaba will announce the details of the planned spending
cuts and revenue increases in the 2018 budget on February 21.
Moneyweb

ANC Succession Battle Paralyzing Government

The politically charged battle for control of South Africas ruling African National Congress (ANC) is
paralyzing several government departments, as ruling party leaders focus on electioneering and officials
delay taking important policy decisions until they learn who their new political leaders are. The front-
runners to replace Zuma are Cyril Ramaphosa (his deputy) and Nkosazana Dlamini-Zuma (former
chairwoman of the African Union Commission and Zumas ex-wife). Ramaphosa has emphasized the
need to reignite growth and restore investor confidence, while Dlamini-Zuma has called for South
African wealth to be more equitably distributed.

Bloomberg

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 Turkey
Country Analyst: Duy Mai

Bank of China granted license to operate in Turkey

Turkeys Banking Regulation and Supervision Agency (BDDK) approved
banking license for Bank of China, the third largest bank in China. Bank of
China Turkey AS can open a deposit bank starting in January by investing
$300m. The bank became the second Chinese bank after Industrial and Commercial Bank of China (ICBC)
purchased a majority stake of Tekstibank last year. Undeterred by the current political situation, Chinese
investments keep on coming as the two countries continue to work on Belt and Road-related initiatives.
Turkeys largest FDI from China was the acquisition of Kumport by Chinese state-owned giant Cosco
Pacific for $940m.
Daily Sabah, Daily Sabah

US-Turkey relations further strained as Turkey seeks arrest of former CIA official
On 1 December, the Istanbul Prosecutors Office issued an arrest warrant for Graham Fuller, a former
vice-chairman of the National Intelligence Council of the Central Intelligence Agency (CIA). The arrest
warrant alleges that Fuller and an American academic, Henri Barkey, helped organize the failed coup in
2016 while they were in Turkey during that period. Turkish prosecutors also believe there is a
connection between Fuller and Fethullah Gulen, whom Turkey alleges to be the coups mastermind. This
development adds complications to the already strained relationship between Washington and Ankara.
As reported earlier, the relationship suffered setback after a visa spat following the arrests of employees
of the US consulate, as well as the ongoing trial of Iranian-Turkish gold traders in the US. Additionally,
the Turkish lira has deteriorated in recent months (TUR/USD stands at 3.91), in response to high
inflation and the uncertain political situation.
Hurriyet Daily News

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 CHINA
Country Analyst: Kartik Vadlapatla

NBS Manufacturing PMI

The official NBS Manufacturing PMI in China unexpectedly rose to 51.8 in
November of 2017 from 51.6 in the prior month while markets expected
51.4. Output (54.3 from 53.4 in October), new orders (53.6 from 52.9) and
new export orders (50.8 from 50.1) increased at faster paces amid
strengthening business confidence (57.9 from 57.0). Also, buying quantity went up more (53.5 from
53.2). Meanwhile, employment declined for the eighth straight month (48.8 from 49.0).

Trading Economics

Caixin Manufacturing PMI

The Caixin Manufacturing PMI in China fell to 50.8 in November of 2017 from 51.0 in the prior month,
below consensus of 50.9. It was the lowest reading since June amid relatively subdued new orders and
new export orders while confidence dipped to a record low and output rose modestly. At the same time,
employment dropped at the fastest pace in three months. Firms faced a further sharp increase in
average input costs, that led to a notable rise in selling prices. "For the most part, the manufacturing
sector remained stable in November, although some signs of weakness emerged," said Zhengsheng
Zhong, director of macroeconomic analysis at CEBM Group, a subsidiary of Caixin. "In Q4, the economy
is likely to maintain the stability observed since the start of the second half of the year. Economic
growth in 2017 is expected to be higher than last year, but it may come under downward pressure in
2018," he added.

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Trading Economics

Non-Manufacturing PMI
The official Non-Manufacturing PMI in China increased to 54.8 in November of 2017 from 54.3 in the
preceding month. New orders rose at a faster rate (51.8 from 51.1 in October), new export orders went
up for the second straight month (50.9 from 50.7) and business sentiment strengthened markedly (61.6
from 60.6). At the same time, orders in hand (44.1 from 43.9) declined less amid shortening suppliers'
delivery time (51.6 from 51.1) while employment contracted for the eleventh consecutive month. The
services sector accounted for over half of the country's economy last year.

Trading Economics

China announces new controls on interest rates, bans unlicensed small loans
China issued new rules to ban unlicensed micro-loans a week after directing provincial governments to
suspend approvals for new online lenders. These measures follow President Xis call to control leverage
after the Communist Party Congress. The party is concerned about social inequalities and fears raised
about these business which often involve small, unsecured loans ($151 bn) with periods of six months or
less targeting people with limited access to credit services such as students and rural migrants. Known
as cash loans, these credit services usually require no collateral but charge high interest rates.
A recent report by Chinas National Committee of Experts on Internet Financial Security Technology, a
government-backed industry organization, estimated that there were 2,693 online platforms in China
offering short-term loans to nearly 10 million clients. Usually interest rates on such loans are quite high
(above 100%) and are now capped to 36% (including upfront fees). In addition, lenders need to clearly
specify charges and are barred from lending to customers with no income, extend, overborrow or
forcibly collect. Predictably, shares of listed online borrowers have reacted negatively.

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Bloomberg, Caixing Global

EU to remove China from list of nonmarket economies

European Union governments are due on 4 December to award the biggest revamp of the blocs method
for calculating duties aimed at countering below-cost or dumped imports. The move is a response to
longstanding Chinese government demands for more favorable treatment. The previous approach
allowed for more duties to be tacked on to Chinese imports. In the context of politics and trade, these
developments show a greater understanding between the EU and China as they seek to fill in the global
trade void left open by the US since President Trumps election. Chinese exports such as reinforcing
steel, solar panels, aluminum foil, bicycles, screws, paper, kitchenware, and ironing boards will be
positively affected. However, to ease the impact of the new system on European manufacturers, the EU
will have recourse to a special formula for calculating anti-dumping duties against countries whose
markets are deemed to have significant distortions resulting from state intervention. Under the new
rules, the EU will be able to construct the normal value of a good in an exporting country using
undistorted costs. China for its part has signaled unease over the new formula underlining the tension
between various blocs within the EU over greater engagement with China as all parties seek a solution.
Bloomberg

Chinese bond yields set for biggest yearly rise

Though there are no official measure of short sales in China, analysts say a surge in bond lending has
been partially fueled by rising short sales. A record 1.82 trillion yuan ($274 billion) of notes has been lent
out this year, which is 18% more than the last year full total, according to clearinghouse ChinaBond.
Short sellers profit from falling bond values by selling borrowed notes and buying them back after prices
fall. The sovereign debt market has slumped 86 bps under the strain of rising inflation and an official
drive to curtail excessive borrowing. The benchmark 10-year sovereign yield is now set for the biggest
annual increase in four years. While Chinese regulators have a history of clamping down on bearish
wagers in the stock and currency markets, they havent taken any major measures to curb short-selling
of bonds. Most of the borrowing of notes has been concentrated on sovereign and policy bank notes as
they are the most liquid. Analysts also believe that there is still more room for rates to rise in the coming
months as they factor in the demand for liquidity.

22
Bloomberg

Russia Yuan Bond sale: To prepare for looming EU and US sanctions, the Russian Finance ministry has
made plans to issue yuan denominated bonds. The bonds are worth nearly $1 bn which while not a
significant amount represent a growth in relations between Russia and China. A report due next quarter
from the U.S. Treasury on the potential consequences of extending penalties to include Russian
sovereign debt has increased pressure on the Finance Ministry to seek out alternative means of
borrowing. China is also Russias biggest trading partner.
Bloomberg

INDIA
Country Analyst: Jason Yoo
New IBC ordinance poses potential hurdles in restructuring NPAs
Two weeks ago, a significant amendment was added to the Insolvency and
Bankruptcy Code (IBC). Overall, the amendment seeks to improve the
effectiveness of turnarounds completed under the IBC framework as well as
to reduce future negligence by business-owners. The newly amended IBC
bans the following parties from participating in the auction process for defaulting companies assets:
guarantors to the debtor, those with loans classified as non-performing assets for at least a
yeardirectors in companies that are disqualified those who have been found to have struck
fraudulent transactions with the firm, and connected entities. The amendment is a welcome one, since
many of the companies currently struggling under debt owe much of their troubles to the negligence or
malintent of their promoters. However, although a positive development for Indias bankruptcy
framework, the amendment has also resulted in some short-term challenges. For example, there is
some speculation that the current wording of the amendment may ban global private-equity firms from
participating in the bidding process. In addition, since the introduction of the amendment, several
parties involved in bankruptcy proceedings have asked for extensions in the workout process, ostensibly
because of a shortage in bidders since the amendment.
LiveMint, LiveMint

India almost reaches its budgeted fiscal deficit; GST collections low
Indias fiscal deficit at the end of October (beginning April) was at 96.1% of the total budgeted amount.
Meanwhile, total revenue government receipts were at 48.1% of the budget estimate. The relatively low
revenue receipts data coincides with October being the worst month of GST collections since the

23
introduction of the new tax regime. Total GST collections for the month of October stood at $12.9
billion. These data-points, in conjunction with the Q2-GDP growth figures, suggest a potential
predicament for the Indian government. Even if the economy shows signs of softness this fiscal year, the
government has very limited room for fiscal spending to boost GDP figures. In addition, technical
glitches with the introduction of the GST as well as the rate cuts introduced on November 15th could
lead to lower-than-budgeted revenue collection, in which case the fiscal deficit would exceed the target
without an offsetting benefit.

LiveMint, Bloomberg

Indias Q2 growth rate rebounds to 6.3%

Indias GDP rose 6.3% year-over-year in the July-September quarter, indicating a slight normalization
after disruptions due to the GST resulted in a 5.7% growth rate in the April-June quarter. Although the
reacceleration is positive, a 6.3% quarterly growth rate is still relatively low; in Q2 of last year, the GDP
grew at 7.5%. In addition, consumption growth continued to decelerate and reached a 6.5% growth in
Q2, representing the slowest growth in eight quarters. Gross fixed capital formation grew 4.7% in Q2;
although representing an acceleration from Q1, the uptick in investments can be primarily attributed to
heavy government spending, which has been front-loaded during this fiscal year. Economic activity in
the construction and agriculture sectors, which are traditionally among the biggest employers of Indias
labor force, also increased at relatively meager paces 2.6% and 1.7%, respectively. Although there
were some bright spots in the economic datanamely, manufacturing growth coming in at 7.0%
overall, the Q2 data suggests that the Indian economy is still struggling to achieve historical growth
figures.

LiveMint, Ministry of Statistics and Programme Implementation

24
Indias infrastructure output increases 4.7% in October
Indias infrastructure output increased 4.7% year-over-year in October, which is the same pace of
growth as in the month of September. The healthy growth in the core infrastructure industries bodes
well for the countrys Q3 economic performance, as core infrastructure activity accounts for nearly 40%
of Indias industrial output.

Trading Economics

Manufacturing PMI for November reported at 52.6

In a sign of improvement in economic activity, India reported a Manufacturing PMI result of 52.6 for
November, signaling growth in manufacturing activity within the country. The reading of 52.6 was the
strongest reading in 13 months. The rebound in manufacturing activity is primarily due to the GST-rate
cuts as well as improved demand; the new orders sub-index stood at 54.2 in November, compared to
49.9 in October. At the same time, however, costs have reportedly increased, which suggests that
inflation may continue to creep up to the 4.0% target set by the MPC. With continued inflation, the MPC
will have less flexibility in terms of rate-cuts to help spur economic growth.

TradingEconomics

China Development Bank files petition for bankruptcy against Reliance Communications
China Development Bank filed a petition for bankruptcy against Reliance Communications (RCom) this
week, after RCom failed to service $7 billion of debt owed to domestic and international creditors in
November. The petition has taken RCom in surprise, as China Development Bank has been actively
participating in the out-of-court restructuring of RComs debts. If the petition is admitted, RCom will
have 18 months to resolve its bankruptcy; otherwise, the company will be forced to liquidate its assets.
China Development Banks petition highlights the importance of the new Insolvency and Bankruptcy
Code in providing a means for international creditors to have an exit in case their loans sour.
The Financial Times, LiveMint

25
India Hosts Global Entrepreneurship Summit (GES)
Per former-President Obamas decision during his administration, India hosted the Global
Entrepreneurship Summit (GES) this year, which is an annual convention of global entrepreneurs,
investors and supporters. The theme of the GES for this year was Women First, Prosperity for All. That
India hosted the GES demonstrates not only the countrys continuing emergence as a hub of innovation
and global business activity but also the strengthening ties between India and the United States.
LiveMint

INDONESIA
Country Analyst: Katrina Knisely

Inflation increases 3.3% YoY

Consumer price inflation rose 3.3% YoY in November, below market
expectations of 3.4% and last months 3.58% rise. This is the lowest inflation
rate in 11 months, with lower growth the price of housing and utilities,
health, and food.

Trading Economics

Tax Amnesty: The Sequel coming to Indonesia in April 2018

Amid pressures to close a shortfall in government revenues, the Indonesian government is planning in
April 2018 to launch a second chapter to its earlier tax amnesty program, which ended in March this
year, giving tax dodgers a second change to report previously hidden assets. Individuals and
corporations who voluntarily report their assets will only have to pay the upper limit of standard income
tax as long as tax investigators do not find them first. The original tax amnesty measure was hailed as
one of the most successful of its kind, yet critics of the second amnesty believe the new effort fails to
create deterrent effects and gives the impression that the government is falling short of its reform
efforts. Ratings agency Moodys has also said Indonesia will need to raise government revenues to win a
credit rating upgrade. Indonesias tax revenue is only around 11% of GDP, lower than that of most of its
Southeast Asian neighbors.
Nikkei

26
Indonesias Speaker of Parliament detained in $173m graft case
Speaker of Indonesia's parliament Setya Novanto last week was detained by anti-corruption
investigators over the biggest graft scandal to hit Indonesias legislature. He has been implicated in five
corruption scandals since the 1990s but never convicted. While he denies any wrongdoing, Setya was
most recently accused of embezzling more than $170 million from a government procurement contract
to introduce a national biometric identification card. The Indonesian parliament has long been perceived
as Indonesias most corrupt institution by watchdogs and by its own citizens, and this is unlikely to
change regardless of the outcome of the case. Indonesia last year placed 90th out of 176 countries on
Transparency International's corruption perception index.
Reuters, New York Times

Indonesia plans to offer tax incentives to manufacturing sector

Indonesias Ministry of Industry said that by early next year, it plans to offer the manufacturing sector
(20% of GDP) three new tax incentives that it says would help accelerate the countrys economy, which
has remained around 5% growth and below its potential in recent years. The plan would provide tax
breaks to firms that invest in worker vocational training programs and in innovation and R&D, and to
firms that are export- and labor-intensive. While these measures may boost output in the short-run,
they will probably not have the desired growth effect without additional reforms that make government
policies more predictable and business-friendlyand less protectionist.
Kontan

Economic impact of this years Bali volcano eruptions estimated at $1.47 billion
The heightened volcanic activity of Mount Agung on the Indonesian resort island of Baliwhich sits
within the Pacific Ring of Firehas kept many tourists away, causing economic losses estimated at $1.47
billion since September, when signs of an impending eruption first began. Alerts were raised to the
highest levels last weekend as eruptions forced the closure of the islands main airport and evacuation
of thousands of residents. Tourism represents 11% of the countrys $932 billion economy, and two out
of every five foreign tourists to Indonesia visit Bali. Authorities expect the volcano to remain active for
some time, and visitors are likely to continue to drop off sharply during the holiday season, which will
further take a toll on Indonesias economy.

WSJ, Nikkei

MALAYSIA
Country Analyst: Gregory Bernstein

27
Ringgit recovery and strength hinges on a confluence of 2018 factors
As the new year approaches, significant speculation continues about the sustainability of the ringgits
rally. Bloomberg analysts have reported almost weekly about the currencys strength against the dollar
and this report has covered previous arguments as to why the ringgit is a good buy in the short term.
However, the ringgits sustained value is becoming increasingly tied to a confluence of factors occurring
in the next year. First, after keeping interest rates steady two weeks ago, it is widely expected that
Malaysias central bank will raise rates early in 2018 (perhaps even in January). This would signal good
news about the health of the economy. However, a general election in the first months of 2018 is
appearing less likely than a few weeks ago, but still possible. Although Prime Minister Najib and his party
are expected to win and thereby maintain current policies, the inherent electoral uncertainty and the
likely rate hike in the US may serve to mute long-term enthusiasm in the ringgits strength. According to
Julian Wee of National Australia Bank, this confluence of factors could prove negative for the ringgit in
2018. These include the general election domestically, an accelerated climb in U.S. bond yields and a
possible slowing of Malaysias economic growth.

The Malaysian Reserve, Straits Times, Bloomberg, NST

Demand for Malaysian durian continues to rise, driven by unrealized Chinese markets
In terms of agricultural commodities, Malaysia and its Southeast Asia neighbors historically have been
known for their production of palm oil. However, a recent demand uptick in China is drawing attention
to a somewhat obscure Malaysian agricultural product, the durian. A spikey fruit with a strange smell,
the durian has not been viewed as a significant trade good until recently. According to the United
Nations, Chinese demand for the fruit has grown steadily over the past decade and the value of Chinas
fresh imports of the fruit has climbed an average of 26% a year, reaching $1.1 billion in 2016. Although
Thailand currently dominates the durian market, Chinese consumers have shifted their buying
preferences to Malaysian durian and according to Ahmad Maslan, Malaysias deputy minister for
international trade and industry, durians and durian-based products are among the most-searched
items in China on sites like Alibaba. With nearly 45,550 durian farmers in Malaysia, a Chinese market
entry is being viewed as a significant Malaysian investment opportunity.

28
NST, Bloomberg

Malaysia hosts 2017 Global Innovation Summit, named top emerging economy
This past week, Kuala Lumpur hosted the 2017 Global Innovation Summit, the first time the event has
been held in Southeast Asia. Although the Summits overall purpose is to focus on global economic
trends and themes, the host economy featured prominently as the World Economic Forum (WEF)
named Malaysia the most competitive economy amongst its peers. According to Global Federation of
Competitiveness Councils (GFCC) president and US Council on Competitiveness (USCC) Deborah Wince-
Smith, Malaysias availability of a pool of skilled workers, rising labor productivity and a lower cost base
rated it ahead of its peers including Indonesia, Thailand, India and Vietnam. Although ratings such as
these are rarely serve as significant market movers, international bodies such as WEF continue to affirm
Razak Najibs scandal-ridden tenure and complement his National Transformation Aspiration to
become a Top 20 Nation in the world by 2050.
NST, The Malaysian Reserve, GIS

PHILIPPINES
Country Analyst: Bilal Kayani
Manufacturing sector sustains growth
The Nikkei Manufacturing Purchasing Managers Index (PMI) jumped to 54.8
in November 2017 from 53.7 in the previous month. This was the highest
reading in a year, indicating a faster pace of improvement in operating
conditions for a third straight month. Much of this improvement has been
attributed to strong domestic economic conditions and higher foreign demand. However,
manufacturers continued to feel the pressure of cost inflation because of the weakness in the peso and
shortage of raw materials. With cost inflation rising, manufactures have raised prices to pass on to
consumers. What will be closely monitored is the Central Banks reaction to further rises in global raw
material costs, and the combination
of a weak peso will most certainly
result in tightening of businesses
profit margins.

29
Trading Economics, Nikkei, Philstar

Business optimism hits high in Q4

Business confidence increased to 43.3 in the fourth quarter of 2017 from 37.9 in the third quarter.
Exporters continued to benefit as a result of moderate and gradual weakening of the peso against the
dollar translating into to higher sales and increased competitiveness. In the region, the peso is the
weakest performing currency, depreciating close to 3% to hit a fresh 11-year low after breaching the 51
to $1 level. Central Bank governor acknowledged this up cycle for exporters with particular mention to
electronics as well as machinery and transport as the greatest beneficiaries. Furthermore, much of the
buoyant outlook can be traced to the expected increase in orders and consumer purchases during the
Christmas holidays, and the increasing number and expansion of businesses.

Trading Economics, BSP, Manila Times

Capital investments surge past regional neighbors

The Philippine government in concert with local firms is drastically ramping up spending. Historically the
private sector has always been investing; however, now government spending is starting to catch up.
Philippine government spending is in for another record budget for 2018 and private sector companies
such Metro Pacific Investments Corp., and Ayla Land Inc. intend to invest almost $18 billion next year in
road, water and power projects. Moreover, President Duterte is ushering in a very ambitious project to
connect the island based nation through a network of railroads and highways set to cost $180 billion
through his cornerstone vision of Build, Build, Build.

30
Bloomberg Bloomberg

SOUTH KOREA
Country Analyst: Beatrice Gohdes
Bank of Korea raises interest rate from a record-low 1.25% to 1.5%
In a surprising move, the Bank of Korea raised its interest rate by 25 bps on
Thursday, as the continuous export boom lifts the economy, private
consumption has improved moderately and investments have been strong.
This decision marks the first change in interest rate since May 2016, and a
move away from stimulus policies. As worries about job market conditions persist, the BOK was careful
to stress that the road to normal level interest rates will be long though, making another rate hike in the
near future unlikely. Still, the direction of future policy decisions seems set, as Koreas monetary policy
moves into tightening territory.

Bank of Korea, Trading Economics

South Koreas Q3 GDP growth revised upward to 7-year high

Seouls statistics office revised earlier estimations of 3.6% YoY GDP growth for Q3 upward to 3.8%, in
the face of a 9.6% increase in exports for November. On quarter, growth was revised from 1.4% to 1.5%.
This is the highest growth rate since the second quarter of 2010 7 years ago. On the supply side, this
was triggered by a substantial uptick in manufacturing of semiconductors and chemicals, leading to a 55-

31
month high. Combined with increased construction activity, these growth drivers offset disappointing
growth numbers from utilities.

Bank of Korea, Trading Economics

Inflation dropped unexpectedly from 1.8% to 1.3% in November

Despite promising growth numbers and positive signals from the Bank of Korea, inflation dropped to a
11-month low. Lower utilities and vegetable prices were largely responsible for this unexpected
development, as forecasts and markets expected a 1.8% increase in prices. Still, the central bank expects
inflation for 2017 to remain at 2%, before decreasing to 1,8% next year.

Wall Street Journal, Trading Economics

Debt relief for 1.6 million low-income Koreans to come from countrys Happiness Fund
Koreans who struggle to repay small debts of less than $9,128 can apply for debt relief from the
government as of February 2018. The plan could clear as much as 6.2 trillion won in bad debts, mainly
funded out of the national Happiness Fund, which was created to help poor Koreans manage their
debt by restructuring it. Household debt is a significant worry in South Korea, as debt levels have been
rising faster than wages. This policy could act as a boost to domestic consumption.
BBC

TAIWAN

32
Country Analyst: Nikunj Beria
Taiwan share market reaches 27-year high due to technology stocks
Taiwans stock market is correlated with the technology sector in the US, mainly Apple stock. Due to the
gain of technology sector in the S&P 500 on 21 November, the tech-heavy Taiwan SE Weighted Index
added as much as 1 per cent to hit its highest point in more than 27 years.

Financial Times

Taiwan manufacturing gauge points to solid growth

Taiwans economy is export-oriented with 35% of its GDP coming from the manufacturing sector led by
technology sector. The steepest increase in export sales for over three years led total new orders to
expand at a similarly sharp rate. As a result, companies scaled up production levels increasing input
buying and raised their staff numbers at quicker rates. This strength in operations led the Nikkei-Markit
manufacturing purchasing managers index (PMI) for Taiwan to 56.3 in November, up from the three-
month low of 53.6 reported in October, Supplier performance with the increase in inputs remains high,
albeit, with careful optimism

Financial Times
Formosa Plastics Group plans $15 billion worth of projects in US
Plastic is heavily correlated with semi-conductor technology since it is used for the creation of
chips. Taiwans largest petrochemical producer, Formosa Plastics Group has made a

33
commitment of investing $15 billion in US states. The projects are focused in southern states of
Texas and Louisiana, mainly in the production of ethylene. Increase Environmental standards in
Taiwan is driving the company to US locations. Additionally, Taiwanese companies such as FPG
and Foxconn are attracted to state incentives in the US and also due to the competition faced in
mainland China where their production plants currently exist.
Nikkei Asian Review

THAILAND
Country Analyst: Christian Conroy
State enterprise investment spending to increase by 52% in 2018
The State Enterprise Policy Office (SEPO) announced on Wednesday that state
enterprises will increase investments by 52% to a total of 796.34 billion baht
($24.4 billion) in 2018. As part of the investment increase, SEPO will require
state enterprises to improve investment plans in order to ensure that the disbursement of the
investment budget aligns to the actual disbursements. According to Deputy Prime Minister Somkid
Jatusripitak, enterprises will also boost the disbursement of investment budgets to no less than 95% of
the total investment budget next year, a target far above the current 70% disbursement rate. State
enterprise investment has increased 9.2% YoY for the first nine months of this year.
The Nation

Ministry of Finance reportedly considering tax deduction for domestic tourism

The Ministry of Finance is reportedly considering a tax deduction of up to 30,000 baht ($920) per head
for Thai citizens who travel to secondary cities and up to 50,000 baht ($1,534) per head for those that
travel during the tourism off-season. The measure, which could go into effect as early as the first quarter
of next year, aims to reduce tax burdens in order to promote domestic tourism among Thais. While 12%
of Thai GDP comes from tourism, domestic tourism remains low; each Thai makes an average of only 1.5
trips to secondary cities per year. Domestic tourism expanded 6.32% in the first nine months of the year.
Chiangrai Times

Major Thai political parties considering alliance ahead of November 2018 elections
Speaking at a seminar organized by the Thai Journalists Association on Sunday, Democrat deputy leader
Nipit Interasombat, Pheu Thai figure Chaturon Chaisang, and Chartthaipattana party member Warawut
Silpa-archa discussed the possibility of the three parties forming a coalition party ahead of democratic
elections scheduled to take place in November 2018. While the figures downplayed the likelihood of
forming an alliance in an environment where the government still has in place a ban on political
activities, Chaisang did stress that the alliance would be worth considering if it meant keeping a non-
elected outsider from assuming the position of prime minister. According to a poll carried out by Suan
Dusit Rajabhat University last month, 41% of Thai citizens want new political parties ahead of next years
election. For the time being, the parties are instead focusing on recruitment drives in order to ensure
that their membership databases meet requirements ahead of a 5 January deadline.
Bangkok Post | Bangkok Post

Thai GDP growth rate expected to exceed 4% in Q4

According to Ministry of Finance official Suwit Rojanavanich, the Thai economy could again exceed a 4%
YoY growth level this quarter. The growth would come on the back of a successful welfare program that

34
has seen 10 million low income earners invest almost 100% of welfare stipends of 300 baht ($9) back
into the Thai economy. With the end of a year-long mourning period for the late Thai king and the
implementation of year-end shopping tax breaks, the Thai government is hoping to continue growing
the Thai economy after posting a 4.3% YoY growth rate in the third quarter.
Business Mirror

35
 Appendix: Macroeconomic Overview

LATAM
Indicator Latest (to previous) Reference Period Frequency
Brazil
GDP Growth 0.1% (-0.1%) Nov 2017 Quarterly
Inflation Rate 2.70% (0.16%) Oct 2017 Monthly
Interest Rate 7.5% (-0.75%) Oct 2017 (9th cut this year)
Debt-to-GDP Ratio 69.5% (6.2%) Dec 2016 Annual
Fiscal Balance -9.0% (+1.2%) Dec 2016 Annual
CA Balance -1.3% (2.0%) Dec 2016 Annual
Chile
GDP Growth 2.2% (1.0%) Sep 2017 Quarterly
Inflation Rate 1.90% (0.40%) Sep 2017 Monthly
Interest Rate 2.50% (unch.) Nov 2017 Monthly
Debt-to-GDP Ratio 21.3% (3.9%) Dec 2016 Annual
Fiscal Balance -2.2% (-0.6%) Dec 2016 Annual
CA Balance -1.4% (0.6%) Dec 2016 Annual
Colombia
GDP Growth 2.0% (0.7%) Sep 2017 Quarterly
Inflation Rate 4.05% (0.08%) Oct 2017 Monthly
Interest Rate 4.75% (-0.25%) Nov 2017 Last lowered Nov 2017
Debt-to-GDP Ratio 47.6% (-3.1%) Dec 2016 Annual
Fiscal Balance -3.8% (-0.7%) Dec 2016 Annual
CA Balance -4.4% (2.0%) Dec 2016 Annual
Mexico
GDP Growth GDP Growth Sep 2017 Monthly
Inflation Rate Inflation Rate Nov 2017 Monthly
Interest Rate Interest Rate Oct 2017 Monthly
Debt-to-GDP Ratio Debt-to-GDP Ratio Dec 2016 Annual
Fiscal Balance Fiscal Balance Dec 2016 Annual
CA Balance CA Balance Dec 2016 Annual
Peru
GDP Growth GDP Growth GDP Growth GDP Growth
Inflation Rate Inflation Rate Inflation Rate Inflation Rate
Interest Rate Interest Rate Interest Rate Interest Rate

36
Debt-to-GDP Ratio Debt-to-GDP Ratio Debt-to-GDP Ratio Debt-to-GDP Ratio
Fiscal Balance Fiscal Balance Fiscal Balance Fiscal Balance
CA Balance CA Balance CA Balance CA Balance

EMEA
Indicator Latest ( to Reference Period Frequency
previous)
Egypt
GDP Growth Rate 4.1% (+0.7%) Oct 2017 Quarterly
Inflation Rate 30.8% (-0.8%) Oct 2017 Monthly
Interest Rate 18.75% (unch.) Oct 2017 Daily
Debt-to-GDP 92.3% (+7.3%) Dec 2016 Annual
CA Balance -5.9% (-2.3%) Oct 2017 Annual
Fiscal Balance -9.8% (+1.8%) Dec 2016 Annual
Greece
GDP Growth Rate 0.5% (unch.) Sep 2017 Quarterly
Inflation Rate 0.7% (-0.3%) Oct 2017 Monthly
Interest Rate 0% (unch.) Sept 2017 ~Monthly
Debt-to-GDP 179.0% (+0.9%) Dec 2016 Annual
Fiscal Balance 0.7% (+6.6%) Dec 2016 Annual
CA Balance -0.6% (-0.7%) Dec 2016 Annual
Poland
GDP Growth Rate 1.1% (unch.) Jun 2017 Quarterly
Inflation Rate 2.1% (-0.1%) Oct 2017 Monthly
Interest Rate 1.5% (unch.) Oct 2017 Daily
Debt-to-GDP 54.4% (+3.3%) Dec 2016 Annual
Fiscal Balance -2.4% (+0.1%) Dec 2016 Annual
CA Balance -0.3%(0.3%) Jun 2016 Annual
Russia
GDP Growth Rate 1.8% (-0.7%) Nov 2017 Annual
Inflation Rate 2.7% (-0.3%) Oct 2017 Monthly
Interest Rate 8.25% (-0.5%) Oct 2017 Daily
Debt-to-GDP 17% (-1.1%) Dec 2016 Annual
Fiscal Balance -3.7% (-1.1%) Dec 2016 Annual
CA Balance 1.8% (-3.3%) Jun 2017 Annual
South Africa
GDP Growth 2.5% (-0.6%) Jun 2017 Quarterly
Inflation Rate 5.1% (+0.3%) Sep 2017 Monthly
Interest Rate 6.75% (unch.) Sep 2017 ~Monthly
Debt-to-GDP Ratio 51.7% (+2.4%) Dec 2016 Annual
Fiscal Balance -3.9% (+0.2%) Dec 2016 Annual
CA Balance to GDP -3.3% (+1.1%) Dec 2016 Annual
Turkey
GDP Growth Rate 2.1% (+0.8%) Sep 2017 Quarterly

37
Inflation 11.2% (+ 0.62%) Sep 2017 Annual
Interest Rate 8% (unch.) Sep 2017 Quarterly
Debt-to-GDP 28.3% (+0.8%) Dec 2016 Annual
Fiscal Balance -1.1% (-0.1%) Dec 2016 Annual
CA Balance - 3.8% (-0.1%) Dec 2016 Annual

ASIA
Indicators Latest ( to previous) Reference Frequency
China
GDP Growth Rate 6.8% (-0.1%) Sep 2017 Quarterly
Inflation Rate 1.90% (+0.19%) Oct 2017 Monthly
Interest Rate 4.35% (unch.) Sep 2017 ~Monthly
Debt-to-GDP 46.20% (-0.4%) Dec 2016 Annual
Fiscal Balance -3.8% (-1.5%) Dec 2016 Annual
CA Balance 1.80% (-0.9%) Dec 2016 Annual
India
GDP Growth Rate 6.3% (+0.6%) Nov 2017 Quarterly
Inflation Rate 3.58% (+0.30%) Oct 2017 Monthly
Interest Rate 6.00% (unch.) Oct 2017 ~Quarterly
Debt-to-GDP 69.54% (-0.1%) Dec 2016 Annual
Fiscal Balance -3.2% (+0.3%) Feb 2017 Annual
CA Balance -2.4% (+0.36%) Dec 2016 Quarterly
Indonesia
GDP Growth Rate 5.05% (+.05%) Nov 2017 Quarterly
Inflation Rate 3.3% (-0.28%) Nov 2017 Monthly
Interest Rate 4.25% (-0.25%) Sep 2017 ~Monthly
Debt-to-GDP 27.90% (+1.00) Dec 2016 Annual
Fiscal Balance -2.46% (+0.12) Dec 2016 Annual
CA Balance -1.80% (+0.20) Dec 2016 Annual
Malaysia
GDP Growth Rate 1.3% (-0.5%) Jun 2017 Quarterly
Inflation Rate 4.3% (+0.7%) Aug 2017 Monthly
Interest Rate 3.0% (unch.) Sep 2017 Update expected Jan 3
Debt-to-GDP 53.2% (-1.3%) Dec 2016 Annual
Fiscal Balance -3.2% (+0.3%) Dec 2015 Annual
CA Balance 1.3% (-1.5%) Dec 2016 Annual
Philippines
GDP Growth Rate 6.9% (+0.4%) Nov 2017 Quarterly
Inflation Rate 3.4%(+3.00%) Oct 2017 Monthly
Interest Rate 3.0% (unch.) Oct 2017 ~Monthly
Debt-to-GDP 42.1% (-2.95%) Dec 2016 Annual
Fiscal Balance -2.4% (-1.5%) Dec 2016 Annual
CA Balance 0.2% (-0.5%) Dec 2016 Annual
South Korea

38
GDP Growth Rate 3.8% (+1.1%) Nov 2017 Quarterly
Inflation Rate 1.5% (-0.3%) Nov 2017 Monthly
Interest Rate 1.5% (+0.25%) Nov 2017 ~Quarterly
Debt-to-GDP 38.6% (+0.8%) Dec 2016 Annual
Fiscal Balance -2.4% (-0.6%) Dec 2016 Annual
CA Balance 6.99% (-0.71%) Dec 2016 Annual
Taiwan
GDP Growth Rate 3.1% (+0.82%) Nov 2017 Quarterly
Inflation Rate -0.32% (-0.82%) Oct 2017 Monthly
Interest Rate 1.38% (unch.) Sep 2017 ~Monthly
Debt-to-GDP 31.2% (-0.4%) Dec 2016 Annual
Fiscal Balance -1.4% (+0.1%) Dec 2016 Annual
CA Balance 13.4% (-0.9%) Dec 2016 Annual
Thailand
GDP Growth Rate 3.7% (+0.4%) June 2017 Quarterly
Inflation Rate 0.86% (+0.54%) Sep 2017 Monthly
Interest Rate 1.5% (unch.) Sep 2017 ~Monthly
Debt-to-GDP 41.2% (-2.7%) Dec 2016 Annual
Fiscal Balance -2.7% (-.02%) Dec 2016 Annual
CA Balance 11.5% (3.5%) Dec 2016 Annual

39