This month’s coverage of the Americas includes a fully updated report on Argentina, which will hold partial congressional elections later this month that will have an impact on the ability of President Mauricio Macri to implement the tax, labor, and pension reforms that are key items among the unfinished business on his government’s legislative agenda. The results of primary elections held in August suggest that the pro-government Cambienos coalition will make gains in both the lower house and the Senate. But even if the governing bloc exceeds expectations, it is very likely that Macri’s congressional allies will still require outside support to pass legislation, and strong opposition from the country’s powerful unions will pose an obstacle to obtaining the cooperation of center-left lawmakers.

The report will assess the prospects for implementing the reforms, as well as the implications of success or failure on near- and medium-term economic performance, which in turn will influence the outcome of the next round of presidential and legislative elections that fall due in October 2019. The economy is rebounding from last year’s contraction, and the markets have responded positively to the outcome of the August primary elections, but the anticipated persistence of legislative hurdles will contribute to a continuing risk of a negative turn in sentiment.

Our extensive coverage of Western Europe includes a detailed analytical assessment of investor prospects in Germany following the recent federal elections won by Chancellor Angela Merkel’s conservative Christian Democratic Union (CDU) with its Bavarian sister party, the Christian Social Union (CSU). The elections saw the far-right AfD enter Parliament for the first time, coming third to the Social Democrats, but also the return of the much-improved liberal Free Democrats, with CDU/CSU unable to form a majority government again on a substantially reduced number of seats. With the SPD ruling out another grand coalition, we assess how Merkel will handle a larger, multi-party arrangement likely to include the Free Democrats and the Greens (the so-called “Jamaica coalition”). Our report looks into how these prospective new partners will influence policy-making on major issues such as immigration, industrialization, and the labor market, which will depend on how ministries are allotted among the coalition partners, and how the likely replacement of Wolfgang Schauble as finance minister affects the government’s fiscal strategy.

Along with other detailed reports on Ireland and Italy, we also include a fresh update on the United Kingdom that assesses the institutional and policy-making risks presented by the weakened Conservative Party government’s ongoing negotiations over the terms of the country’s withdrawal from the EU. The report will identify what investors may expect in terms of a prospective trade deal with the European bloc and other Brexit-related features. We assess the government’s cohesiveness following the party conference season, its confidence and supply arrangement from the Irish unionist party, DUP, and the survival prospects of Prime Minister Theresa May amid speculation of her successor.

We also look more closely at the evolving hard-left policies of the main opposition Labour Party, and its improving prospects of claiming victory at the next elections, thanks in large part to the growing appeal of the party’s leader, Jeremy Corbyn, particularly among younger voters. Our report rounds out with coverage of the main macro-fiscal indicators, with forecasts for 2018, noting prospects for the exchange rate and a shift in monetary policy from the Bank of England.

Turning to Eastern Europe, our coverage this month features an update on Slovakia, where questions about the viability of Prime Minister Róbert Fico’s ideologically diverse governing coalition were recently raised anew when the far-right nationalist SNS threatened to pull out of the government unless the coalition agreement was rewritten to give it more influence. SNS leader Andrej Danko has at least temporarily walked back his threat, but the corruption scandal at the center of latest tensions will weigh on the popularity of Fico’s center-left Smer-SD, adding to the uncertainty that would accompany the early demise of the governing coalition.

The analysis will include an assessment of the risk that the coalition will collapse before the end of the current term in March 2020, and a discussion of both the ideological composition and the policy preferences of the alternative governing coalitions that could emerge in the event of an early election. The update will also examine the state of Slovakia’s relations with the EU, and how that could affect both near-term economic performance and the country’s attractiveness as a destination for foreign investment over the medium term.

Shifting to the Middle East and North Africa, the October roster includes updates on Morocco and Libya, where unexpected progress toward resolving a political conflict that has left both the country and the government administration divided along regional lines occurred in July, with the conclusion of a conditional cease-fire agreement between Fayez al-Serraj, the head of the internationally backed unity government based in Tripoli, and Khalifa Haftar, the commander of the armed forces that serve as the de facto military of the rival “salvation government” based in Tobruk. However, no other parties have endorsed the deal, and with the US adopting a more aloof posture toward Libya under President Donald Trump and the European powers continuing to back competing factions on the ground, little substantive progress has been made toward meeting the goal of holding elections to create a single national government in 2018.

The update will assess the prospects for overcoming the obstacles to a permanent resolution of the political crisis, and what success or failure in that regard will mean for the risk associated with doing business in Libya. The cease-fire agreement has helped to reduce impediments to pumping and selling the country’s oil reserves, a development that will have a significant positive impact on the performance of an economy that contracted for a fourth consecutive year in 2016. However, the surge in growth expected in 2017 will not be sustained, and the risk of renewed disruptions in the oil sector will grow the longer the political impasse drags on.

Finally, PRS’ coverage of Sub-Saharan Africa incudes an update on Nigeria that looks at how the country is coping in the aftermath of the oil crisis, and in the light of the recent ill health of Muhammudu Buhari, who has a year-and a-half left of his presidential term and is eligible for re-election. We assess what has become a very uncertain political picture caused by his absence, currently being stage-managed by Buhari’s close aides denying organizing pro-Buhari protests, with cabinet meetings cancelled. Our report also looks at the deteriorating prospects of peace talks with Niger Delta rebels in a key hydrocarbons-producing region where attacks on the oil infrastructure are commonplace, amid other border and internal security risks that reflect the countries deep ethno-religious divisions.

In terms of economic policy and performance, the update will examine how the government is managing the underfunded budget and the rising debt load. We also provide detailed prospects for GDP growth and inflation, look at features such as business tax issues, and corruption risk, and how the currency will be determined more by capital flows, oil prices and political factors over the coming 6-12 months with exchange rate controls relaxed.

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