This month’s coverage in the Americas will include an update on Argentina where President Mauricio Macri is in a race against time, as the failure of the economic shock therapy administered by his center-right government to deliver a promised economic recovery is contributing to growing impatience among an electorate that the president is counting on to deliver a legislative majority for his administration at mid-term elections scheduled for October 2017.  Although positive real growth is forecast this year, inflation will remain in double digits, and easing upward pressure on consumer prices hinges on a policy of wage restraint that will contribute to a militant spirit among the unions.  The update will assess the governing coalition’s prospects for achieving a congressional majority, and will discuss what Macri can expect to accomplish if he succeeds on that front, and what avenues for implementing reforms will be open to him should he fail.

Looking at the Middle East and North Africa, PRS will issue a fully revised report on Morocco, where a months-long impasse in coalition negotiations has finally been broken, but only after Abdelilah Benkirane agreed to forego another term as prime minister.  The report will include an assessment of the stability of the new multiparty government, which will be headed by Benkirane’s PJD colleague, Saad Eddine el-Othmani.  In that vein, PRS will discuss what the diverse policy preferences of the constituent parties portend in terms of the prospects for implementing the liberal reforms that will be essential if Morocco hopes to attract the level of investment required to boost living standards, in general, and reduce the very high unemployment rate among younger workers, in particular.

Turning to sub-Saharan Africa, our coverage will include an update on Congo, where the ruling PCT is expected to sweep the parliamentary elections later this year, cementing President Denis Sassou-Nguesso’s grip on power.  The main opposition parties announced a new alliance in December, but the PCT enjoys an overwhelming advantage in terms of financial and organizational resources.  Public spending cuts necessitated by the negative impact of low oil prices on government revenue has contributed to discontent among the electorate.  The recent upward movement of oil prices and the start of production at Total’s Moho Nord field are expected to bring the return of positive growth in 2017, but with the economy forecast to grow by just 1% in real terms, the possibility of a popular backlash that produces some election surprises cannot be ruled out.

Our extensive Western European coverage this month is headed-up with a detailed report on Germany, as we look ahead to the federal elections on September 22, assessing the prospects of Angela Merkel and her main challenger Martin Schulz, the former head of the European Parliament, who has taken over from Sigmar Gabriel as chair of the center-left SPD, which is currently the junior partner in the coalition government headed by Merkel’s CDU.  Our report will assess whether either the CDU or the SPD might be able to form a majority coalition that does not include the other, or, despite statements from the leaders of both parties suggesting that they have grown tired of the current governing arrangement, they will instead need to renew their marriage of convenience and form another grand coalition.  The report will also examine the risks posed by the growing appeal of populist parties against the backdrop of discontent over Merkel’s asylum policy, and how that phenomenon might affect both the election outcome and the policy direction of the next government.

Elections are also the key theme in our report on the Netherlands, where voters proved to be surprisingly immune to the far-right populist appeal of Geert Wilders’ PVV.  The report will examine the degree to which Wilders and his anti-Muslim and euroskeptic message will continue to have resonance among Dutch voters, and how that might affect the strategy of the next government.  In addition to assessing the viability and examining the policy preferences—particularly with regard to fiscal consolidation and debt reduction—of the possible coalition configurations, PRS will also examine the risks stemming from the potentially negative impact of Brexit on trade with the UK, alongside the opportunities created by an improvement in the broader global trade system.

Turning to Eastern Europe, PRS will publish an update on Poland, where the populist PiS government continues to create headaches for the country’s EU partners.  Although he holds no official government position, PiS leader Jaroslaw Kaczynski has become the focus of political attention in Poland, owing to his increasingly antagonistic posture toward the EU, which was on full display during his recent failed attempt to block the re-election of his one-time political rival, Donald Tusk, as president of the European Council.  The update will focus on assessing how far the PiS might be willing to pursue its strategy of challenging the authority of the EU’s political institutions, and what that implies for the policy direction under the current regime, relations between Poland and the EU over the medium term, and the long-term stability of the EU.

Finally, our Asia coverage includes a fully revised report on Myanmar, which has been watch closely by investors as the country has made the transition from an insular military dictatorship to managed democracy that welcomes foreign investment and trade.  PRS critically appraises the record of the civilian government elected in 2015, and assesses the outlook for political stability, taking into account the still-powerful influence of the military and escalating sectarian violence in Rakhine State that has highlighted the intractability of conflicts rooted in ethnic animosity.  Our report also examines the next stage of regulatory reform and how it will impact on economic stability in 2017-2018, looking at major macro-risk factors influencing returns, such as growth, inflation, and foreign exchange earnings.

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