Our extensive coverage of the Americas this month includes an update on the United States that will examine whether the disappointing economic growth data for the fourth quarter of 2015 is cause for deep concern, assess the risk of further battling between President Barack Obama and the opposition-controlled Congress that could derail a weak but sustained recovery, and provide an early assessment of how the November presidential and congressional elections might turn out. PRS will also issue an update on Guatemala, where a political crisis driven by revelations of a massive network of corruption in the government played a key role in the election of a political novice to the presidency. Comic actor Jimmy Morales took office in early 2016 with little chance of building a stable, sustainable majority coalition in the Congress, a handicap that will compound the risks stemming from his evident lack of anything resembling a concrete plan for governance.

Rounding out the regional coverage, PRS will also produce a fully updated report on Venezuela, where the election of a center-right majority at congressional elections held in early December creates a basis for dismantling the institutional underpinnings of the leftist “revolution” initiated by Hugo Chávez in the late 1990s. Unfortunately, Chávez’s protégé, President Nicolás Maduro, has signaled that he has no intention of ceding any political ground to his opponents, a stance that creates a high risk of a constitutional crisis that could provoke military intervention, most likely on behalf of Maduro. The growing risk of political instability bodes ill for near-term relief from dismal economic conditions, which will only get worse in the increasingly likely event of sovereign default. The report will discuss the requirements for rescuing Venezuela from its current deep predicament, and under what circumstances those requirements might actually be met.

Looking at the Middle East and North Africa, PRS will issue a revised reports on Egypt, where recent legislative elections produced a National Assembly dominated by parties and independents who are broadly supportive of the political and policy program offered by the country’s new strongman president, Adel Fattah el-Sisi. The report will assess what Sisi’s strengthened position means in terms of the implementation of a liberal economic reform program and the broader climate for investment and trade in Egypt. Particular attention will be paid to security-related risks, which, if not adequately contained, could undermine confidence in Sisi’s ability keep the country safe, a development that would have negative implications for both political stability and the attractiveness of the country’s investment opportunities.

This month’s examination of Sub-Saharan Africa includes a report on Gabon, which is scheduled to hold a presidential election in August with an economy straining under the weight of diminishing oil export revenue. Although the incumbent Omar Bongo Ondimba is expected to win a second seven-year term, he faces a potentially strong challenge from Jean Ping, a former top figure in the governing PDG and an experienced campaigner who is running as the joint candidate of a coalition of opposition parties campaigning on a platform of political reform. Recent strikes by public sector workers demanding payment of back wages and bonuses are an unmistakable indicator of mounting fiscal problems that are likely to encourage the government to grant high priority to financing infrastructure projects while leading to delays in payment for imports. The report concludes with an assessment of whether the credit rating agencies are keeping a close enough watch on the negative trends in the country.

Our extensive coverage of Western Europe this month includes a detailed report on Italy, where bond yields are pinned by the ECB’s quantitative-easing program and the coalition government is talking up the prospect of lucrative business deals with Iran. However, PRS will examine the risk implications of the rescue of four small banks last year, and the government’s plans for resolving the legacy of bad debts that is now stirring some concern in the financial markets. Our report moreover looks at the wider issues bedeviling Prime Minister Matteo Renzi’s stuttering reforms agenda, as well as a summary analysis of the state of the economy and the prospects for finally achieving an economic recovery that has so far proved elusive, owing to a poor regulatory environment that deters investment, low productivity, and lingering fears of a debt crisis.

Banking sector issues also dominate our report on Austria this month, as we assess the very latest developments concerning the resolution of creditor claims on HETA, the agency in charge of the bad debts from the failed Hypo Group Alpe Adria. Our report looks at the federal- and state-level political implications of this banking saga as well as how Europe’s refugee crisis and Austria’s sub-par economic prospects are shaping public opinion domestically and inflicting damage on Austria’s investor reputation. Our report looks at how vulnerable economic growth is, its likely effects on unemployment, and to what extent this is affecting the governing coalition’s cohesiveness and policymaking in the light of gains for the far-right in sub-national elections last year and a presidential election on the horizon. Our report rounds out by looking at whether the government has the strength of will to make the deeper cuts in public spending needed to reverse the steady rise in the debt burden, which is approaching 90% of GDP.

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