This month’s coverage of the Americas includes an update on Ecuador, where President Lenin Moreno continues to pursue a business-friendly policy agenda, much to the chagrin of his predecessor, Rafael Correa, and the more leftist elements of the governing AP. Moreno’s crackdown on corruption has netted some big fish, including his own vice president, Jorge Glas, and he is pushing for a referendum on constitutional reforms aimed at restoring checks on presidential power, including a term limit that would prevent Correa from mounting a re-election bid in 2021.

Moreno’s approval rating is soaring, but his defiance of Correa has opened a rift within the AP, which removed Moreno as its leader at a party conference held in early December. The update will focus on the potential for increased political turmoil in the coming months, and will assess Moreno’s prospects for implementing his reform agenda without the unified backing of the AP. In that regard, we will examine how planned spending cuts aimed at containing a fiscal deficit that has been swelled by a fall in oil revenues figure to affect Moreno’s political standing.

As well as a report on Belgium this month, our coverage of Western Europe includes a detailed update on prospects for Portugal at the halfway mark of the government’s four-year term, following a year in which investors have eagerly snapped up Portuguese sovereign bonds as the recovery from the debt crisis continues. We assess political stability in the light of the twin forest fire tragedies causing 200 deaths, public protests and a ministerial resignation, and more generally at the travails of a minority Socialist Party administration propped up by its hard-left partners. The relationship has worked well until now, but the pressure is beginning to build as little effort is made to implement structural reforms, and the demands continue growing for increased welfare spending. Our report rounds out by looking ahead to 2018, with predictions for key macro-variables, such as GDP growth, inflation, the current-account and key fiscal metrics by delving into the government’s newest budget bill to discover whether the new year will see risk-return options rejigged.

Alongside extensive Asia Pacific coverage of Indonesia, the Philippines and Thailand this month, we also include a detailed report on developments in South Korea. As well as analysing foreign policy risk linked to the heightened security situation on the Korean Peninsula, we also look at important domestic political developments. They include new ministerial appointments, completing the cabinet six months after Moon Jae-In’s presidential elections success, and the recent purge on corruption which many view as a means for political revenge than any moves toward genuine political reform. Our report also looks closely at prospects for the economy in 2018 in the light of exchange rate, interest rate, oil price and household debt trends, providing forecasts for GDP growth, inflation, the current account and fiscal indicators.

Shifting to the Middle East and North Africa, the December roster includes an update on Iraq, where the central government appears to have beaten back a challenge to its authority by Kurdish separatist political forces and the military has ISIL on the run.  The government’s defeat of threats to the country’s territorial integrity will serve Prime Minister Haider al-Abadi well as he seeks a second term at elections that fall due in spring 2018, but the challenges to forming a stable majority coalition will be greater than they have ever been, and his prospects for overcoming the obstacles in that regard will be the central focus of our analysis.

Finally, PRS’ coverage of Sub-Saharan Africa incudes a timely consideration of the risk outlook for Zimbabwe following a bloodless military coup in November 2017 that brought an end to the long reign of President Robert Mugabe and seems to have decided a factional battle for control of the ruling party. Our report assesses whether, and how, the investor climate is likely to change under the new president, Emmerson Mnangagwa, a ZANU-PF insider, and not a young man either, with a formidable reputation himself. We look at his Cabinet, what role the military is likely to play, and what reforms—whether economic or political—the new leader will seek to implement ahead of elections that are required by September 2018.  With that in mind, we look closely again at the economic problems the country is facing, focusing on the extreme fiscal challenges, excessive unemployment problem, and creditor relations, and how addressing these will affect social stability following an initial flurry of excitement among those who were understandably delighted to see the back of Mugabe’s regime.

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